The rupee was trading in a narrow range against the US dollar in early trade on Wednesday, as the support from positive domestic equities was negated by strong American currency.
Forex traders said elevated crude oil prices and significant foreign fund outflows in the international market dented investors' sentiments.
At the interbank foreign exchange market, the local unit opened at 83.29, registering a gain of 2 paise from its previous close. In initial trade, the local unit also saw a low of 83.32 against the American currency.
On Tuesday, the rupee closed at 83.31 against the American currency.
Forex traders said the rupee to trade with a slight positive bias on improved global risk sentiments and easing of geopolitical tensions in the Middle East. However, any fresh aggressions in the Middle East may cap gains for the local unit.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.67, lower by 0.01 per cent.
Brent crude futures, the global oil benchmark, rose 0.07 per cent to USD 88.48 per barrel.
"Brent oil prices inched up to USD 88.40 per barrel as US crude stocks showed a surprise drop last week, which was a positive sign for demand, as attention shifted away from hostilities in the Middle East," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
The rupee is expected to see range-bound trade between 83.20 to 83.40 on Wednesday, Bhansali added.
On the domestic equity market, the 30-share BSE Sensex was trading 173.24 points, or 0.23 per cent higher at 73,911.69 points. The broader NSE Nifty was up 48.15 points, or 0.22 per cent, to 22,416.15 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 3,044.54 crore, according to exchange data.
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