The rupee was trading in a narrow range against the U.S. dollar in early trade on May 8, amid a negative trend in domestic equities and strong American currency.
Forex traders said significant foreign fund outflows in the international market dented investors' sentiments.
At the interbank foreign exchange market, the local unit opened at 83.50, and touched 83.49 in initial trade, registering a gain of 2 paise from its previous close.
On May 7, the rupee closed at 83.51 against the American currency.
Forex traders easing crude oil prices supported the rupee and restricted the downside.
“Demand for dollars from foreign investors kept the rupee down on May 7 and though May 8th’s opening looks to be flat, the demand should continue. Selling by the Reserve Bank of India (RBI) could keep it range-bound.
"Importers are expected to adopt 'wait and watch' approach with a stop loss on breach of 83.60," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.55, higher by 0.14%.
Brent crude futures, the global oil benchmark, fell 0.43% to $82.80 per barrel.
On the domestic equity market, the 30-share BSE Sensex was trading 256.62 points, or 0.35% lower at 73,255.23 points. The broader NSE Nifty was down 60 points, or 0.27%, to 22,242.50 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 7 as they offloaded shares worth ₹3,668.84 crore, according to exchange data.
