The rupee appreciated 19 paise to 82.19 against the US dollar in early trade on Friday on broad dollar weakness and a firm trend in domestic equities.
Forex traders said sustained foreign fund outflows weighed on investor sentiments and restricted the appreciation bias.
At the interbank foreign exchange, the domestic unit opened at 82.30 against the dollar, then gained further ground to touch 82.19, registering a rise of 19 paise over its previous close.
On Thursday, the rupee settled 9 paise higher at 82.38 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.23 per cent to 104.53.
"With China relaxing its COVID restrictions such as mass testing, lockdowns and quarantine requirements, it is widely feared that cases and deaths would shoot up, causing further widespread economic disruptions. This is something we need to keep a close eye on," IFA Global Research Academy said in a research note.
Brent crude futures, the global oil benchmark, advanced 0.89 per cent to USD 76.83 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 25.7 points or 0.04 per cent higher at 62,596.38. The broader NSE Nifty rose 19.25 points or 0.1 per cent to 18,628.60.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday as they offloaded shares worth Rs 1,131.67 crore, according to exchange data.
With inputs from Agencies.
