It ended at 46.1250/1350 per dollar, rising from an intraday low of 46.2525 to end a touch stronger than Fridays 46.15/16. The rupee fell to 46.2750 during Friday trade, its lowest since January 5.
The rising euro pushed the rupee stronger, said a senior trader with a private bank, adding that Wednesdays opening tone would likely be dictated by the dollars moves.
The euro rose against the dollar on better than expected demand at a Greek sovereign bond sale. The index of the dollar against six major currencies was down 0.2%.
The rupee had earlier eased as the benchmark share index fell 0.5%, their fifth successive loss.
10-year bonds fell the most in a week on speculation the central bank will act to curb money supply at its policy meeting on January 29 to cool inflation.
Yields rose as the RBI will probably ask banks to set aside a greater proportion of their deposits as reserves.
Investors are paring their positions because bond prices have rallied quite a bit over the past week, said S. Srikumar, chief of fixed-income at state-owned Corporation Bank. There will be an element of caution in the run up to the policy meeting.