Non-deliverable forwards indicate the rupee will open at around 83.71-83.72 to the U.S. dollar, little changed from its close at 83.7275 in the previous session, its weakest level on record.
While traders expect the rupee to weaken to fresh lifetime lows this week, the decline is likely to be gradual as the Reserve Bank of India continues to intervene to support the local currency.
Intra-day price action on the rupee is likely to "remain muted with state-run banks' expected to remain on offer (on USD/INR) on the road towards 83.75-8.80," a foreign exchange trader at a private bank said.
The dollar index was down 0.1% at 104.2 after data on Friday showed that U.S. prices rose largely along expected lines in June. Asian currencies were mostly higher, with the Thai baht up 0.8% and leading gains.
U.S. bond yields were lower as well, with the 10-year yield down 3 basis points at 4.17%.
The key focus this week will be on central bank policy decisions, including the Federal Reserve's due on Wednesday.
While the Fed is widely expected to keep rates unchanged, investors will pay close attention to remarks from Chair Jerome Powell for cues on the future path of policy rates.
"With markets confidently pricing in a September U.S. first rate cut, any hint or rhetoric from the Fed that pushes back against such a move could re-exert depreciatory pressure on Asian FX," Lloyd Chan, a senior currency analyst at MUFG Bank, said in a note.
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