The rupee was trading in a narrow range against the US dollar in early trade on Thursday amid a rally in the stock markets.
In the interbank forex, the rupee witnessed range-bound trading in opening deals. It opened at 79.22 against the US dollar, then declined by 6 paise to 79.31 against the previous close.
In the morning trade, it was trading in a limited range of 79.22-79.31.
On Wednesday, the rupee had gained 38 paise to close at 79.25 against the US currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.16 percent to 105.36 after official data showed US inflation fell from a 40-year high in June to a low gasoline low in July. 8.5% on prices.
Meanwhile, global oil benchmark Brent crude futures rose 0.12% to $97.28 per barrel.
Forex traders said there is a possibility of trading on a mixed rupee note. Recovery from lower levels in the domestic markets and FII inflows may support the local unit.
On the domestic equity market front, the 30-share Sensex was trading 582.67 points or 0.99% higher at 59,399.96, while the broader NSE Nifty was up 159.80 points or 0.91% at 17,694.55.
Foreign institutional investors remained net buyers in the capital markets on Wednesday as they bought shares worth Rs 1,061.88 crore, according to exchange data.