The rupee on Monday dived 18 paise to close at a five-week low of 75.07 against the US dollar as fresh worries over new coronavirus variant weighed on already weak investor sentiment.

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At the interbank foreign exchange market, the local currency opened at 74.84 and witnessed an intra-day high of 74.82 and a low of 75.16 against the US dollar in a highly volatile trading session.

The local unit finally settled at 75.07 a dollar, down 18 paise over its previous close.

The Indian rupee depreciated for the third straight session against the US dollar weighed down by greenback demand from oil companies and fresh long dollar positions amid concerns over a new coronavirus variant, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Investors will now await the Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen testimony before Congress this week, he added.

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Investor concern resurfaced about lockdowns amid a rise in COVID cases in Europe and a new variant, detected in South Africa.

According to Jateen Trivedi, Senior Research Analyst at LKP Securities, the rupee traded weak below 75.00 as the COVID-19 new strain, Omicron, has pressured parts of Australia, China, Euro Asia to restrict travelling and reinstating control over movements especially in & out of the country.

"Going ahead, developments of new strain spread will be keenly watched by markets. The range for rupee can be seen between 74.85 and 75.35," Trivedi said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.11 per cent up at 96.19.

Meanwhile, Brent crude futures, the global oil benchmark, advanced 4.29 per cent to USD 75.84 per barrel.

On the domestic equity market front, the BSE Sensex ended 153.43 points or 0.27 per cent higher at 57,260.58, while the broader NSE Nifty advanced 27.50 points or 0.16 per cent to 17,053.95.

Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 5,785.83 crore, as per exchange data.