Rupee rises 6 paise to 83.31 against U.S. dollar in early trade

Rupee strengthens against the dollar amid lower oil prices, but faces resistance due to domestic market sentiment and dollar strength.

The rupee appreciated by 6 paise to 83.31 against the U.S. dollar on Tuesday amid softening crude oil prices in the international market.

Forex traders said, however, the local unit faced some resistance due to subdued sentiment in the domestic equity market and a stronger American currency.

At the interbank foreign exchange market, the local unit opened strong at 83.32 and inched up further to trade at 83.31 against the greenback, registering a gain of 6 paise from its previous closing level.

On Friday, the rupee had settled 13 paise higher at 83.37 against the U.S. dollar. The forex markets were closed on Monday on account of general elections.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.57, higher by 0.11%.

Analysts attributed the strengthening dollar to higher U.S. treasury yields even as the Federal Reserve has indicated that it needs more time to assess the progress on inflation.

Brent crude futures, the global oil benchmark, declined 0.54% to $83.26 per barrel.