Rupee matches record closing low as dollar bids persist

The Indian rupee ended weaker on Monday, matching its record closing low as sustained dollar demand from state-run and foreign banks maintained pressure on the local unit, despite a rally in its Asian peers.

The rupee ended at 83.34 against the U.S. dollar, down 0.08% from its close of 83.27 on Friday. The currency had previously closed at this level on Nov. 10, the same day it fell to a record low of 83.42.

Most Asian currencies strengthened, with the offshore Chinese yuan up over 0.6% and leading the gains. The dollar index fell to 103.46, its lowest since early September.

"It is too early to say whether this is genuine buying of risk assets or more just short-covering ahead of Thursday's U.S. Thanksgiving public holiday," ING Bank stated in a note, referring to the dollar weakness.

But the rupee has struggled to gain as dollar demand has persisted amid a lack of inflows, a foreign exchange trader at a private bank said.

"Outflows are intact but inflows are not as robust as we would expect in such a broad based USD selloff."

State-run banks and foreign banks were seen bidding for dollars on Monday, likely on behalf of clients, another trader said.

The rupee is moving lower steadily but it will be key to see if follow-on dollar demand emerges at these levels, said Gaurang Somaiya, a FX and rates researches at Motilal Oswal Financial Services.

The 10-year U.S. treasury yield edged higher to 4.46% in Asia hours, but is hovering close to near two-month lows.

While the week is relatively light on economic data, investors will be keeping an eye on the minutes of the Federal Reserve's October meeting and initial jobless claims data in the U.S., due on Tuesday and Wednesday, respectively.