The rupee appreciated 13 paise to 74.26 against the U.S. dollar in opening trade on August 23, tracking a strong rally in the domestic equities and weak American currency overseas.
However, rising crude prices in the international market and foreign fund outflows capped the rupee gains, forex traders said.
At the interbank foreign exchange, the rupee opened strong at 74.27 against the dollar, then lost some ground to quote 74.26, registering a rise of 13 paise over its previous close.
On Friday, the rupee had settled at 74.39 against the U.S. dollar.
On the domestic equity market front, BSE Sensex was trading 245.07 points or 0.44% higher at 55,574.39, while the broader NSE Nifty rose 52.60 points or 0.32% to 16,503.10.
The U.S. dollar was struggling against its major rivals in the overseas market.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.20% to 93.30.
Global oil benchmark Brent crude futures surged 1.93% to $66.44 per barrel.
Meanwhile, foreign institutional investors were net sellers in the capital market on August 20 as they offloaded shares worth ₹2,287.03 crore, as per exchange data.
