The Indian rupee declined 0.4% to 87.26 against the U.S. dollar as of 9:45 a.m. IST.
The reference rate, or the daily fix, was quoted at a 1/1.20 paisa premium, signalling strong dollar bids, a trader said.
Meanwhile, the dollar index ticked up to 103.8, recovering from a four-month low hit last week after data showed the U.S. economy created slightly fewer jobs than expected.
While worries about trade policy uncertainty and a slowdown in the U.S. economy have hurt the dollar, tepid risk sentiment has kept a lid on gains for Asian currencies.
The dollar index has fallen more than 3% in March so far.
“Tariff delays and exemptions could also remain a drag on the U.S. dollar, with President (Donald) Trump flip-flopping with his tariff policies,” MUFG Bank said in a note.
In an interview on Sunday, Trump declined to predict whether the U.S. could face a recession amid stock market concerns about his tariff actions on Mexico, Canada, and China.
US tariffs of 25% on imports of steel and aluminium will take effect on Wednesday and investors await the announcement of reciprocal tariffs in early April.
Asian currencies were mostly weaker on the day led lower by the yuan, which declined 0.3% to 7.25, hurt by worries over an escalating global trade war and fresh signs of economic wobbles.
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