The rupee inched up 5 paise to 72.63 against the US dollar in opening trade on Tuesday amid a firm trend in the domestic equity market and subdued American currency.

At the interbank forex market, the domestic unit opened at 72.64 against the US dollar and inched higher to 72.63 against the greenback, registering a rise of 5 paise over its previous close.

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On Monday, the rupee had settled at 72.68 against the American currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.22 per cent to 90.27.

"The local currency could be buoyed by upbeat risk appetite in the markets amid FPI flows into the domestic markets and subdued dollar," Reliance Securities said in a research note.

Moreover, Asian currencies are also trading strong this morning and could lift sentiments in the domestic markets. However, the Reserve Bank's presence could cap gains for the domestic unit, the note added.