The rupee appreciated by 22 paise to 70.47 against the US dollar in early trade on Friday, tracking gains in domestic equities amid reports of a meeting between foreign investors and finance ministry officials regarding higher tax surcharge during the day.
At the interbank foreign exchange, the rupee opened at 70.54, then gained momentum and touched a high of 70.47, registering a rise of 22 paise over its previous close.
The domestic unit pared some gains and was trading at 70.53 against the dollar at 1006 hrs.
Forex traders said positive opening in domestic equity market, easing crude oil prices and reports that leading foreign investors will meet senior finance ministry officials on Friday on issues like higher tax surcharge supported the domestic unit.
On Thursday, the rupee snapped its five-day losing streak to close higher by 20 paise at 70.69 against the US dollar on Thursday tracking sharp gains in domestic equities after reports of rollback of a tax surcharge on foreign portfolio investors.
Meanwhile, foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 437.39 crore on Thursday, according to provisional exchange data.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.06 per cent to 97.55.
Brent crude futures, the global oil benchmark, fell 0.26 per cent to trade at USD 57.23 per barrel.
Domestic bourses opened on a bullish note on Friday with benchmark indices Sensex trading 247.29 points higher at 37,574.65 and Nifty up 77 points at 11,109.45.
The 10-year government bond yield was at 6.41 per cent in morning trade.