The rupee depreciated 5 paise to 83.53 against the US dollar in early trade on Wednesday, weighed down by the strong American currency and elevated crude oil prices.

Forex traders said the rupee is trading in a narrow range as US dollar buying by oil companies and Foreign Portfolio Investors (FPIs) further dented investor sentiment, while a firm trend in domestic equities supported the rupee at lower levels.

At the interbank foreign exchange market, the rupee opened at 83.51 and lost further ground to trade at 83.53 against the greenback in initial deals, registering a fall of 5 paise from its previous closing level.

On Tuesday, the rupee depreciated 4 paise to settle at 83.48 against the US dollar.

"... Global factors such as the elevated US DXY around 105.50, the depreciation of the Yen and Yuan, and the rise in US bond yields have prevented the rupee from gaining significant strength and moving away from its multi-month low," CR Forex Advisors MD Amit Pabari said.

Rupee traders are in for a roller-coaster ride, though within a constrained range of 83.20 to 83.70 for the time being, Pabari added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 105.71, lower by 0.01 per cent, following a surge in US treasury yields.

Brent crude futures, the global oil benchmark, advanced 0.55 per cent to USD 86.71 per barrel.

In the domestic equity market, Sensex hit the historic 80,000-mark and Nifty scaled fresh lifetime highs in early trade. The BSE Sensex was later trading 446.5 points, or 0.56 per cent higher at 79,887.95 points. The broader NSE Nifty advanced 132.50 points, or 0.55 per cent, to 24,256.35 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 2,000.12 crore, according to exchange data.

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