The rupee appreciated 2 paise to 83.25 against the US dollar in morning trade on Thursday, amid a drop in crude oil price and softness in the American currency. The local unit opened at 83.26 a dollar compared to its previous close of 83.27.
The US dollar Index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.06% to 105.52.
On Wednesday, the rupee closed at 83.27 against the US dollar.
However, a muted trend in domestic equities and sustained foreign fund inflows weighed on the investor sentiments.
The rupee is anticipated to maintain its strength, thanks to the ongoing support from domestic factors, which remain robust due to a promising demand outlook driven by major festivals,” CR Forex Advisors MD Amit Pabari said.
Despite ongoing outflows from FPIs, consistent inflows in the debt market offset any prevailing negative sentiment, Pabari added.
Meanwhile, Brent crude futures, the global oil benchmark, were trading 0.13% higher at $79.64 per barrel on falling oil demand.
Forex traders said the rupee is likely to track its Asian peers and remain range-bound.
The benchmark equity indices traded flat on the domestic front amid mixed global cues.
The BSE Sensex fell 42.83 points, or 0.07%, to 64,932.78, while the NSE Nifty 50 eased 18.95 points, or 0.1%, to 19,424.55.
According to exchange data, Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth ₹84.55 crore.