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The rupee is expected to weaken further this week, due to dollar buying by importers. There is also market concern that the yuan's devaluation would lead to India following a strategy of competitive devaluation.
Last week, the rupee fell to nearly a two-year low, breaching 65 to a dollar. "This week, the trading range will be between 64.50 and 65.60, and the bias is more towards weakening," said the head of treasury of a state-run bank.
On Friday, it ended at 65.01 from Thursday's 65.11. It had opened at 65.18 and during intra-day trade, touched a low of 65.31.
Government bond yields are expected to stay range-bound. "The yield on the 10-year bond might trade in the 7.7-7.8 per cent range," said a trader.
Consumer Price Index inflation eased to 3.78 per cent in July, compared with 5.4 per cent a month ago.
On Friday, a day after this data was released, the yield on the 10-year benchmark bond ended at 7.75 per cent from the previous close of 7.74 per cent.
