The rupee appreciated by 10 paise to close at 82.72 (provisional) against the US dollar on Monday, as the American currency retreated from its elevated levels.
Forex traders said a muted trend in domestic equities and foreign fund outflows weighed on investor sentiments and restricted the appreciation bias.
At the interbank foreign exchange market, the local unit opened at 82.69 against the American currency and finally settled at 82.72 (provisional) against the greenback, registering a gain of 10 paise over its previous close of 82.82.
During the trading session, the rupee touched a high of 82.62 and a low of 82.74 against the dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.04 per cent to 103.90.
Global oil benchmark Brent crude futures advanced 1.05 per cent to $83.87 per barrel.
"Rupee traded strong near 82.75 as dollar index traded below $104 guiding rupee strength. Asian currencies were trading strong on the back of weakness in the dollar," said Jateen Trivedi, VP Research Analyst at LKP Securities.
Trivedi further noted that the US Fed's minutes update will be keenly watched this week for further trend.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they offloaded shares worth ₹624.61 crore, according to exchange data.
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