Mumbai: The rupee pared initial gains to settle 4 paise lower at 87.56 against the US dollar on Monday, tracking a strong greenback and a recovery in crude oil prices.
Forex traders said investors were cautious ahead of the implementation of the August 27 tariff deadline and the upcoming US economic data ahead of the Federal Reserve’s September 17 meeting.
At the interbank foreign exchange market, the rupee opened on a positive note at 87.38, then touched an early high of 87.34 and an intraday low of 87.61 against the US dollar.
The domestic unit settled for the day at 87.56, registering a decline of 4 paise over its previous close.
On Friday, the rupee fell 27 paise to close at 87.52 against the greenback.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.24 per cent to 97.95.
Recent dovish commentary from US Federal Reserve Chairman Jerome Powell, which has fuelled expectations of a potential rate cut as early as next month, supported the dollar.
Meanwhile, India’s forex reserves rose by $1.488 billion to $695.106 billion during the week ended August 15, according to RBI data released on Friday. In the previous reporting week, the overall reserves had increased by $4.747 billion to $693.618 billion.