The rupee pared initial gains to settle down by 2 paise at 74.68 against the US dollar on Monday due to firming crude oil prices and dollar buying by importers. Gains in domestic equities, foreign fund inflows and a weak US currency helped restrict rupee losses, forex dealers said.
In a highly volatile session, the rupee opened at 74.53 against the US dollar, and touched an intra-day high of 74.52 and a low of 74.82.
The domestic unit finally closed at 74.68 against the US dollar, down 2 paise over its previous close of 74.66 on Friday.
"Despite lower safe-haven currencies, the rupee was unable to add gains today amid higher crude oil prices and bargain buying of dollars by the importers. The Indian rupee gained 1.32 per cent or one rupee a dollar in the previous week," Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities said.
Vakil further said that the trend for the Indian rupee remains on bullish side following weaker dollar index and foreign fund inflows.
"Spot USDINR is having support at 74.30 and resistance at 75 for next couple of days," he said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.24 per cent to 96.94.
On the domestic equity market front, the 30-share BSE benchmark Sensex settled 465.86 points, or 1.29 per cent, higher at 36,487.28; while the NSE Nifty soared 156.30 points, or 1.47 per cent, to 10,763.65.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 857.29 crore on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 1.66 per cent to USD 43.51 per barrel.
Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.14 crore and the death toll has topped 5.34 lakh.
In India, the death toll due to the disease rose to 19,693 and the number of infections spiked to 6,97,413, according to the health ministry.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.7843 and for rupee/euro at 84.0486. The reference rate for rupee/British pound was fixed at 93.2720 and for rupee/100 Japanese yen at 69.56.