The local unit traded in a narrow band of 73.54-73.64 per US dollar in early trade.
On Monday, the rupee had settled at 73.35 against the US dollar.
"US markets were shut on account of Labour Day and therefore there are no overnight cues to follow. We are seeing the US nominal yields firm up and we are seeing US dollar strength in pockets," said Abhishek Goenka Founder and CEO, IFA Global.
Goenka further said that "if the broader USD remains stable, the down side in USD-INR could be limited. It appears the central bank is content keeping volatility in check and allowing readjustments in USD-INR happen when there is a significant global USD move".
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.44 per cent to 93.12.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 219.02 points higher at 38,636.25, and the broader NSE Nifty rose 42.10 points to 11,397.15.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 6.93 crore on a net basis on Monday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.12 per cent to USD 41.96 per barrel.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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