The rupee rose 5 paise to 83.23 against the US dollar in early trade on Wednesday, recovering from its steep loss in the past two sessions amid a massive selling by foreign equity investors and a strengthening American currency.

Weak sentiment in the global equity markets and surging crude oil prices also weighed on the Indian currency, forex traders said.

At the interbank foreign exchange, the domestic unit opened at 83.23 and traded in a narrow range of 83.21 to 83.24 against the greenback. It later traded at 83.23 against the dollar, registering a gain of 5 paise from its previous close.

Also read: Weekly rupee view: Rupee faces headwinds as dollar gains strength

The rupee lost 34 paise in the past two sessions. It closed 15 paise lower at 83.28 against the dollar on Tuesday, a day after registering a loss of 19 paise.

The downward movement of the rupee was attributed to a strengthening dollar amid a record rise in US Treasury yields. Also, the US dollar surged to a ten-month high level after a Federal Reserve policymaker hinted at a prolonged interest rate hike cycle.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.04 per cent to 106.27.

Brent crude futures, the global oil benchmark, were trading 0.98 per cent higher at $94.88 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 243.26 points or 0.37 per cent lower at 65,702.21 points. The broader NSE Nifty declined 63.25 points or 0.32 per cent to 19,601.45.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth ₹693.47 crore, according to exchange data.