The rupee rose 9 paise to 83.10 against the US dollar in early trade on Friday amid a retreating dollar versus major rivals, and positive cues from the equity markets.

Massive selling of equities by foreign investors and an upward trend in crude oil prices, however, capped the rise of the domestic currency, forex dealers said.

The Indian unit opened strong at 83.13 against the US dollar and touched the highest level of 83.09. It later traded at 83.10 against the greenback, registering a gain of 9 paise from its previous close.

On Thursday, the rupee settled 3 paise higher at 83.19.

Analysts said higher interest rates and US bond yields were prompting foreign investors to stay in the selling mode in Indian capital markets, while the rupee witnessed some recovery due to a significant decline in India's current account deficit (CAD).

CAD has dropped to $9.2 billion, or 1.1 per cent of GDP in the first quarter of the current fiscal, from $17.9 billion (2.1 per cent of GDP) a year ago, the Reserve Bank of India said on Thursday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, declined by 0.19 per cent to 106.02.

Brent crude, the global oil benchmark, was trading 0.05 per cent higher at $95.43 per barrel.

On the domestic equity market front, the BSE Sensex climbed 84 points or 0.13 per cent to 65,592.32 in early trade. The Nifty advanced 37.75 points or 0.2 per cent to 19,562.30.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth Rs 3,364.22 crore, according to exchange data.

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