The Indian rupee slipped to its lowest level in five weeks Monday as traders covered short dollar positions.
A weak euro and a fall in local share prices also weighed on the rupee, traders said.
The euro fell below the key level of $1.2900, while the Bombay Stock Exchange's benchmark Sensitive Index gave up its early gains to trade 0.1% lower.
At 0820 GMT, the dollar was trading at 54.04 rupees, its highest level since Sept. 21. It was at 53.56 rupees in late Asian trade Thursday.
India's currency markets had a holiday Friday. This has increased dollar demand Monday, especially from oil companies to settle their month-end import bills, traders said.
A trader at a Swiss bank said the rupee is under pressure also as some investors have been selling the local currency ahead of the Reserve Bank of India's rate-setting meeting Tuesday at 0530 GMT.
Twelve of 15 economists polled by Dow Jones Newswires expect the central bank to keep its repurchase rate, or the overnight lending rate, unchanged at 8.0%.
