The rupee surrendered all its early gains to settle 7 paise lower at 74.15 (provisional) against the U.S. dollar on Monday, in line with weaker Asian peers against the greenback.
Higher crude oil prices also put pressure on the Indian currency.
At the interbank foreign exchange (forex), the domestic currency opened sharply higher at 73.95 a dollar and gained further strength to touch a high of 73.83 during the day.
It, however, could not hold on to the gains and finally settled at 74.15 against the greenback, 7 paise lower over its previous close.
In the previous session, the rupee had gained 28 paise to end at 74.08 against the U.S. dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.14 % to 92.35.
Brent crude futures, the global oil benchmark, rose 2.15 % to USD 40.30 per barrel.
Forex traders said that the rupee declined in spite of record buying in equities as strengthening U.S. dollar against key rivals in Asia and elsewhere turned sentiment unfavourable in domestic forex market.
On the equity front, the BSE Sensex ended 704.37 points or 1.68 % higher at 42,597.43 — its record closing high.
Similarly, the broader NSE Nifty ended at a lifetime high of 12,461.05, up 197.50 points or 1.61 %.