The Indian rupee declined 31 paise to close at 70.87 against the US dollar on Monday amid rising demand for the greenback vis-a-vis other currencies overseas, even as crude oil prices eased.
Forex traders said globally risk appetite has plunged as US-China trade concerns continue to linger. Besides, selling in domestic equities and unabated foreign fund outflows also weighed on the local unit.
At the interbank foreign exchange market, the rupee opened on a strong note at 70.37, then lost ground and fell to an intra-day low of 70.88 against the American currency.
However, it finally closed at 70.87 per US dollar, down 31 paise over its previous close.
"During early trades, rupee surged to 8-week high of 70.36, however, the gains got capped by RBI intervention," Emkay Global Financial Services Currency Research Head Rahul Gupta said.
Gupta further said that "there is a possibility that US may curb investments in China. Thus, as we near October 10, any developments on US-China trade front will keep rupee under pressure."