Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking expect the rupee to trade in the 74.80 to 76.60 band for the next few weeks.
Indian rupee erased some of its intraday gains but ended higher at 75.54 per dollar, amid buying seen in the domestic equity market.
It has opened 26 paise at 75.35 per dollar and touched intraday high of 75.29 per dollar.
At 14:11 IST, the Sensex was up 903.67 points or 2.79% at 33327.77, and the Nifty was up 251.70 points or 2.63% at 9832.00.
"Although the rupee may find some ground temporarily due to dollar inflows and a rebound in domestic equities, where the 76.60 mark is providing a cushion, it will be difficult for the rupee to climb above the 74.80 mark," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.
"The overarching trend for the rupee looks weak. There could be several sanctions put forth by the US on China, which will sour risk appetite further, given the long-standing history of trade war between the two sides. We expect the rupee to trade in the 74.80 to 76.60 band for the next few weeks," she added.
Oil prices fell nearly 1% on Monday as traders hedged bets with the Organization of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June.
"The dilemma between bulls and bears continued throughout the month of May and rupee remained range bound. There is some optimism in the forex market over coronavirus vaccine while the hostility between US and China is escalating, keeping the positive sentiments in check," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
"The residual flows from foreign fund and strength in local equities will support the appreciation in rupee, however, the trade tiff will be the major threat. We expect USD/INR spot to trade in between 75.25-76 in the coming days," he added.
