The rupee appreciated 1 paisa to 82 against the US dollar in early trade on Tuesday, tracking a weak dollar and positive trend in domestic equities.
Forex traders said the upward trend in crude prices and outflow of foreign funds from equities market restricted the gain in the local unit.
At the interbank foreign exchange, the domestic unit opened at 81.99 against the dollar. It went as high as 81.96 and touched the lowest level of 82.02.
Later, the rupee was trading at 82, registering a gain of 1 paisa over its previous close.
Rupee on Monday
On Monday, the rupee settled at 82.01 against the dollar.
According to Anand James, Chief Market Strategist at Geojit Financial Services, the Indian currency may see a see-saw movement until it reaches the 81.76 level, indicating an upswing.
"As long as dips do not extend past 81.80, expect upswings. It would however require consistent trades above 81.97 to confirm upside intention and set trajectory towards 82.07 first and then 82.4.
"Alternatively, inability to float above 81.76 could render the trend sideways, with 81.6 continuing to act as a near term support," James said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.08 per cent to 102.03.
The oil prices after a 2 per cent fall on Monday steadied during the early trading session on Tuesday. Brent crude was flat at $84.76 a barrel, while West Texas Intermediate was at $80.88 a barrel up by 5 cents.
The markets on Tuesday opened in green with Sensex at 59,977.65, up by 66.9 points and Nifty rose by 23.45 points at 17,730.30. Tata Motors, HCL Technologies, Axis Bank, Maruti and ICICI Bank were the top gainers whereas Bharti Aritel, HDFC Bank, Tech Mahindra, HDFC and Wipro were the top losers.
Foreign Institutional Investors (FIIs) turned net sellers in the capital markets on Monday as they offloaded shares worth Rs 533.20 crore, according to exchange data.
With inputs from PTI
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