The rupee strengthened by 5 paise to 73.59 against the US dollar in opening trade on Monday, supported by foreign portfolio inflows and strong opening in domestic equities. At the interbank forex market, the domestic unit was trading in a narrow range against the US dollar, it opened at 73.62 against the greenback, then gained ground and touched 73.59 against the American currency, registering a rise of 5 paise over its previous close.
In a volatile trade, the local unit also touched a low of 73.64 against the American currency.
On Friday, the rupee ended almost flat at 73.64, up 2 paise, against the US dollar.
"Weakness of the US dollar, optimism surrounding vaccine roll-out, dollar inflows into local equities could keep depreciation bias limited. On the other hand, RBI’s presence in the market could keep appreciation bias limited," Reliance Securities said in a research note.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading down 0.20 per cent at 90.79.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 84.04 points higher at 46,183.05, and the broader NSE Nifty rose 26.30 points to 13,540.15.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 4,195.43 crore on a net basis on Friday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.68 per cent to USD 50.31 per barrel.