The rupee appreciated 9 paise to 82.73 against the U.S. dollar in early trade on January 5, supported by easing crude oil prices 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 82.75 against the dollar, then gained ground to touch 82.73, registering a rise of 9 paise over its previous close.
On Wednesday, the rupee recovered from its all-time low level and settled at 82.82 against the dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.04% to 104.21.
Brent crude futures, the global oil benchmark, rose 0.99% to $78.61 per barrel.
Despite the greenback's weakness elsewhere, the rupee did not strengthen on dollar persistent bids throughout the session. The local unit has been extremely range bound of late, IFA Global Research Academy said in a research note.
"We expect the rupee to trade in an 82.60-82.90 range with sideways price action," it added.
In the domestic equity market, the 30-share BSE Sensex was trading 162.86 points or 0.27% higher at 60,820.31. The broader NSE Nifty rose 60.20 points or 0.33% to 18,103.15.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth ₹2,620.89 crore, according to exchange data.
