The rupee depreciated by 64 paise to settle at 75.73 against the US dollar on Monday due to fears of a renewed trade war between the US and China, snapping its four-day winning run.
Heavy sell-off in domestic equities and a strengthening greenback overseas also weighed on the rupee.
"The greenback surged following safe-haven buying as uncertainty increased after President Trump threatened to impose new tariffs on China," Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking, said.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.27 per cent to 99.35
The selloff in domestic and global equities has led to selling pressure in the domestic currency at the beginning of the week, Sachdeva added.
The rupee opened weak at 75.70 at the interbank forex market and dropped to a day's low of 75.80. The rupee finally ended at 75.73, down 64 paise over its last close of 75.09 on Thursday.
Forex market was closed on Friday on account of Maharashtra Day.
Sachdeva further said that "going ahead, the sentiments remain weak and fresh concerns that trade tensions could delay an economic recovery are likely to weigh on the local unit. The Indian rupee is likely to gyrate in the range of 75.20 and 76.60 in near term."
"The US-China tension resurfaced with Trump's threat to retaliate and impose tariffs on China. Sentiments across the globe is weak after the US accused China over concealing severity of coronavirus outbreak to hoard medical supplies. This tension along with lockdown in India sent the rupee weakening further beyond 75.70," Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities, said.
In India, the death toll due to COVID-19 rose to over 1,370 and the number of cases climbed to 42,530 as on Monday, according to the health ministry.
In India, the coronavirus-induced lockdown has been extended beyond May 4, for another two weeks.
Meanwhile, the number of cases around the world linked to the disease has crossed over 35.23 lakh and the death toll has topped 2.47 lakh.
On the domestic front, market participants will be keeping an eye on inflation and industrial production number which will be released next week.
Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, observed that the rupee (Spot) is expected to quote in the range of 75.20 and 76.05 due to safe-haven buying of the dollar after the US President threatened to impose new tariffs on China.
Benchmark Sensex on Monday crashed nearly 6 per cent or over 2,000 points in line with massive selloffs on global bourses. The broader NSE Nifty suffered a heavy loss of 566.40 points, or 5.74 per cent, to settle at 9,293.50.
Foreign institutional investors remained net buyers in the capital market, as they purchased equity shares worth Rs 1,968.80 crore on Thursday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 2.42 per cent to USD 25.80 per barrel.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.1150 and for rupee/euro at 81.6170. The reference rate for rupee/British pound was fixed at 93.5923 and for rupee/100 Japanese yen at 70.48.
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