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The rupee is trading lower at 61.96/97 from its close of 61.9250/9350 on Friday ahead of the interim budget presentation due to start at 11 am.
Dealers largely expect Finance Minister P Chidambaram to stick to his fiscal deficit aim of 4.8% this FY; will also look at market borrowing numbers for FY15.
"Big expenditure numbers will be negative for the rupee," says a dealer with a state-run bank.
Traders will also watch domestic stock and debt markets for clues on the direction of foreign fund flows.
Most Asian share markets edged higher on Monday in a nod to the resilience of Wall Street, but Japanese stocks struggled with both a stronger yen and a surprisingly weak reading on economic growth.
Local shares up 0.5%.
