The rupee slipped 10 paise to finish at a fresh lifetime low of 82.40 against the US dollar on Monday, weighed down by risk-averse sentiment among investors.
Moreover, a negative trend in domestic equities and a firm greenback overseas sapped investor appetite, forex traders said.
At the interbank foreign exchange market, the local currency opened at 82.68, then fell further to an all-time intra-day low of 82.69.
According to forex traders, the local unit pared initial losses on possible central bank intervention and finally settled for the day at an all-time low of 82.40 against the American currency, down 10 paise over its previous close.
On Friday, the rupee had depreciated by 13 paise to close at 82.30.
"The Indian rupee pared opening losses on possible central bank intervention and corporate inflows... lower crude oil prices also supported the rupee in today's session," said Dilip Parmar, Research Analyst, HDFC Securities.
However, the directional trend remains bearish for the rupee amid tighter liquidity conditions and risk-averse sentiments, Parmar said, adding, "Spot USD-INR is having near-term resistance at 82.90 and support at 81.95."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.23 per cent to 113.05.
Global oil benchmark Brent crude futures fell 0.71 per cent to $97.22 per barrel.
On the domestic equity market front, the 30-share BSE Sensex dropped 200.18 points or 0.34 per cent to end at 57,991.11, while the broader NSE Nifty fell 73.65 points or 0.43 per cent to 17,241.00.
Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 2,250.77 crore, as per exchange data.
"Rupee fell to fresh all-time lows as the dollar continued to strengthen against its major crosses.
“The dollar gained after data showed the economy added 263,000 jobs in September as compared to expectation of 250,000 job addition," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
The greenback also gained after Ukraine's counter-offensive strike against the invading Russian forces saw a massive explosion take place on the Kerch Bridge, Somaiya said.
Uncertainty has been on the rise also as North Korea fired two ballistic missiles early on Sunday, Somaiya said, adding that volatility could remain low as the US markets remain shut on account of Columbus Day.
According to Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas, the Indian rupee touched a fresh record low on strong greenback post strong monthly job report in the US on Friday.
"We expect Rupee to trade with a negative bias amid weak global markets, strong dollar and downward revision of India's GDP forecast by World Bank," Choudhary said.
Surge in crude oil prices as OPEC+ has decided to cut down on oil production by 2 million barrels per day from November to stabilise oil prices may also put downside pressure on rupee.
"Investors may remain cautious ahead of US inflation data later this week," Choudhary said, adding, "We expect USD-INR spot price to trade in the range of 81.50 and 83 in next couple of sessions."
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