Rupee rose by 2 paise to 83.95 against the US dollar in early trade on Friday amid a weaker dollar against major currencies overseas.
An upward movement in the international crude oil prices, negative domestic equity markets and outflow of foreign capital capped gains in the local unit, forex traders said.
At the interbank foreign exchange market, the rupee opened 1 paisa higher at 83.96 against the greenback. The domestic unit had settled 4 paise higher at 83.97 on Thursday.
On Wednesday, the rupee had breached the crucial 84-mark for the second time within a month and settled 3 paise lower at 84.01 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.10 per cent to 100.97 points.
Analysts said the American currency was trading lower as investors were awaiting cues from the US jobs data to be released later in the day.
Brent crude, the international benchmark, was marginally up by 0.01 per cent at USD 72.70 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex fell 189.44 points, or 0.23 per cent, to 82,011.72, while the Nifty was down 52.55 points, or 0.21 per cent, to 25,092.55.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 688.69 crore, according to exchange data.
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