The rupee weakened 12 paise to quote at 68.74 against the dollar ahead of Union Budget 2016 that Finance Minister Arun Jaitley will present in the Parliament later today.
A firm dollar against some global currencies overseas and a lower opening of the domestic equity market also weighed on the rupee.
The rupee bounced back by 10 paise to end at 68.62 against the American currency in Friday's trade on fag-end selling of dollars.
Globally, the dollar index, which tracks the greenback against a basket of six major world currencies, fell 0.09 per cent to 98.06.
Dollar took a breather against the yen on Monday following a steep climb on upbeat US data, while reaction to a weekend meeting of G20 policymakers was muted as the outcome produced no major surprises.
Among Asian currencies, the Malaysian ringgit dropped 0.37 per cent, the Korean won declined 0.35 per cent against the US dollar. The Thai baht (down 0.28 per cent), the Indonesian rupiah (down 0.19 per cent) and the Chinese yuan (down 0.10 per cent) also slipped in trade.