The rupee inched up 3 paise to 71.31 against the US dollar in early trade on Wednesday even as foreign fund outflows continued amid firming oil prices. At the Interbank Foreign Exchange (forex) market, the domestic unit opened strong at 71.29 but gave up the gains to trade at 71.31.
The rupee had closed at 71.34 versus the greenback Monday. Money markets were closed Tuesday on account of Chhatrapati Shivaji Jayanti.
Foreign institutional investors (FIIs) remained in sell-off mode, offloading shares worth a net Rs 813.76 crore Tuesday, while domestic institutional investors (DIIs) bought equities to the tune of Rs 1,163.85 crore, provisional data showed.
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Brent crude futures, the global oil benchmark, was trading 0.14 per cent higher at USD 66.54 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was marginally down by 0.01 per cent at 96.51.
Meanwhile, the benchmark BSE Sensex rose after nine straight sessions of fall. It rebounded 282.75 points, or 0.80 per cent, to 35,635.36 in early session Wednesday.