The rupee on Monday settled 3 paise lower at 71.74 against the dollar in line with weaker key global currencies against the greenback, despite a strong rally in financial markets on renewed hopes of a trade truce between Washington and Beijing.

After opening on a positive note, the Indian unit traded flat for a better part of the session before slipping into a negative territory. It finally settled at 71.74, registering a loss of 3 paise over its previous close.

The Indian currency overlooked a host of encouraging factors, including positive news on the US-China trade deal front and the Indian government’s divestment steps to curb fiscal deficit and robust foreign fund inflows.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.01 per cent to 98.27. In the year so far, the rupee has weakened 2.7 per cent, while foreign investors have bought nearly $12.4 billion in Indian equities and $4.57 billion in debt during the period.

Other Asian currencies had a mixed day on Monday. The South Korean won rose 0.3 per cent, China Offshore was 0.2 per cent up, and the Taiwan dollar was a tad higher. However, the Japanese yen lost 0.2 per cent. Brent crude futures, the global oil benchmark, traded 0.09 per cent lower at $63.33 per barrel.

Meanwhile, the 10-year government bond yield was at 6.47 per cent on Monday.