The rupee traded in a narrow range to settle 5 paise higher at 83.23 (provisional) against the US dollar on Thursday, tracking softening crude prices in the international markets amid lingering geopolitical uncertainties.

However, foreign fund outflows, a weak greenback overseas and a negative trend in domestic equities weighed on investor sentiment, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.26 against the US currency and witnessed a high of 83.23 and a low of 83.28 during intra-day trade.

The local unit settled at 83.23 (provisional), registering a gain of 5 paise over its previous close.

The rupee declined on Thursday, pressurised by a weak tone in the domestic markets and a rise in US dollar. FII selling also weighed on the domestic currency, said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 106.61.

Global oil benchmark Brent crude futures fell 1.92 per cent to $89.74 per barrel.

"We expect the rupee to trade with a slight negative bias as risk aversion in the global markets amid rising geopolitical uncertainty in West Asia may put pressure on the rupee," Choudhary said.

However, any diplomatic efforts to contain the conflict in West Asia may support the rupee at lower levels. Traders may take cues from weekly unemployment claims and existing home sales data from the US.

"Investors may remain cautious ahead of US Federal Reserve Chair, Jerome Powell’s speech for some cues over monetary policy trajectory. The USD/INR spot price is expected to trade in a range of Rs 83 to Rs 83.60," he said.

On the domestic equity market front, the 30-share BSE Sensex advanced 18.11 points or 0.03 per cent to end at 61,981.79 points, and the broader NSE Nifty rose 33.60 points or 0.18 per cent to 18,348.00 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they sold shares worth Rs 1,831.84 crore, according to exchange data.