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The rupee is expected to weaken this week, as dollar demand from importers is set to gain momentum.
"The trading range is seen at 59.80 to 60.50 this week," said a currency dealer with a state-run bank.
On Friday, the rupee had opened at 60.31. It ended at 59.94, while the previous close was 60.21 to a dollar.
While the rupee might weaken, government bond yields on the other hand, will depend on the Consumer Price Index (CPI)-based inflation numbers for June, to be released this week. According to bond dealers, yields are seen rising.
The yield on the 10-year benchmark government bond ended stable at 8.77 per cent on Friday. The yield had risen to 8.84 per cent during intra-day trades, a level previously seen on May 20. The yield had ended at 8.86 per cent on the same day.
"The yield on the 10-year bond may breach 8.80 per cent this week. There is selling pressure on the existing 10-year benchmark bond because a new 10-year bond may be auctioned soon," said a bond trader with a state-run bank.
CPI-based inflation in May eased to 8.28 per cent from a three-month high of 8.59 per cent in April. The Reserve Bank of India will review monetary policy on August 5 and the broad expectation is that the repo rate will not be changed.
