The Indian rupee opened on a cautious note and fell 8 paise to 71.28 against the US dollar in early trade on Monday amid a muted opening in the Sensex and Nifty and sustained foreign fund outflows.
The rupee opened at 71.24 then fell to 71.28 against the US dollar, showing a decline of 8 paise over its previous closing.
The Indian rupee on Friday had gained 9 paise and closed at 71.20 against the US dollar.
In 2019 so far, the rupee has weakened by over 2%.
Indian stock markets opened on a cautious note on Monday with Sensex trading 17.12 points down at 40,428.03 and Nifty lower by 14.05 points at 11,907.45.
A fall in the rupee also comes at a time when traders are awaiting fresh cues on a US-China trade deal and are looking at the probability of US hiking tariffs on Chinese imports on December 15 as planned.
In India, rising inflation and a downward trend in the Industrial production numbers, which is expected to post weaker than anticipated data could result in the rupee staying under pressure against the US dollar.
India’s retail inflation data and the factory output data is due to come out on Thursday. As per a survey by Bloomberg, Consumer prices could show a 5.22% increase in November as against the same period last year. Meanwhile, the survey expects Industrial production to contract by 4.8%. In September, it contracted by 4.3%.
Speaking of fund outflows, foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 867.66 crore on Friday, as per provisional data.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.01 per cent to 97.71.
The rise in the Dollar came after the employment numbers in the US registered a surprise. The unemployment rate fell to 3.5% compared to 3.6% in the previous month.
The Dollar also gained strength amid expectations that the Fed would not cut rates in the meeting that will happen this week.
With PTI inputs