The rupee appreciated by 5 paise to close at 81.92 (provisional) against the US dollar on Monday, as a positive trend in domestic equities and fresh foreign fund inflows boosted investor sentiments.

At the interbank foreign exchange market, the local unit opened at 81.85 against the American currency and finally settled at 81.92 (provisional) against the greenback, registering a gain of 5 paise over its previous close of 81.97.

During the trading session, the rupee touched a high of 81.62 and a low of 81.95 against the dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.06 per cent to 104.58.

Global oil benchmark Brent crude futures declined 0.77 per cent to USD 81.17 per barrel.

The Indian rupee touched a fresh one-month high of 81.62 on extended rally in the domestic markets and fresh foreign inflows. Positive Asian currencies also supported the domestic currency, said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

"We expect the rupee to trade with a slight positive bias on the rise in risk appetite in global markets and a soft dollar. Overall weak tone in crude oil and FII inflows may also support rupee," Choudhary said.

However, global economic slowdown may cushion the downside. Dollar can witness some volatility this week ahead of Fed Chair Powell's testimony and labour market data from the US later this week, Choudhary added.

On the domestic equity market front, the 30-share BSE Sensex advanced 415.49 points or 0.69 per cent to end at 60,224.46, while the broader NSE Nifty rose 117.10 points or 0.67 per cent to 17,711.45.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Friday as they purchased shares worth Rs 246.24 crore, according to exchange data.

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