"During early trades, rupee surged to 8-week high of 70.36, however, the gains got capped by RBI intervention," Rahul Gupta, currency research head, Emkay Global Financial Services said.

Globally risk appetite has plunged as US-China trade concerns continue to linger, analysts said.

Mr Gupta added that "there is a possibility that US may curb investments in China. Thus, as we near October 10, any developments on US-China trade front will keep rupee under pressure." According to reports, US-China trade talks are set to resume from October 10.

Besides, selling in domestic stock markets and unabated foreign fund outflows also weighed on the local unit on Monday.

The Sensex ended 155 points or 0.40 per cent lower at 38,667 and the NSE Nifty 50 index declined 0.33 per cent or 38 points to close at 11,474.

Foreign investors pulled out a net Rs 213.60 crore from domestic equities on Friday, according to exchange data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 99.27.

"Rupee shall remain in a tight range of 69.80-71.20 levels for the next few trading sessions," said Amit Pabari, managing director, CR Forex Advisors.

"Global and domestic developments shall be closely monitored for further cues," Mr Pabari added. The central bank is scheduled to announce its next bi-monthly monetary policy on October 4.