The dollar was close to 81.90 provisional against the US dollar on Monday, despite a weak American currency and sustained foreign fund inflows.
The local unit was opened at 82.14 and touched an intra-day high of 81.90 and a low of 82.32 against the dollar on the interbank foreign exchange market.
The local unit was finally settled at 81.90 and rose 45 paise over its previous close, despite a positive trend in domestic equities.
The had appreciated by 53 paise to close at 82.35 on Friday.
Asian markets were jumped today after a surge in US and European markets on Friday, said Anuj Choudhary Research Analyst at Sharekhan by BNP Paribas.
Choudhary said the rupee is expected to trade with a positive bias on rise in risk appetite in global markets and weak dollar.
FII inflows may support rupee. A surge in crude oil prices may cap sharp gains. There is a chance that investors will be cautious ahead of trade balance data from India.
Market participants should be vigilant ahead of inflation data from the US later this week. The spot price is expected to trade in a range of Rs 81.25 to Rs 82.80, according to Choudhary.
The dollar index, which gauges the strength of the dollar against a basket of six currencies, fell 0.31 per cent to 110.52.
The global oil benchmark Brent crude futures fell 0.41 per cent to USD 98.17 per barrel.
On the domestic equity market front, the 30 share BSE Sensex gained 234.79 points or 0.39 per cent to end at 61,185. The NSE Nifty gained 85.65 points or 0.47 per cent to 18,202, while the broader NSE Nifty gained 85.65 points or 0.47 per cent. Foreign Institutional Investors FIIs were net buyers in the capital markets on Friday as they purchased shares worth Rs 1,436. According to exchange data, 25 crore were reported to be affected.