MUMBAI: The rupee appreciated by 27 paise to 71.85 against the US dollar in early trade on Thursday.
At the interbank foreign exchange, the rupee opened at 71.87, then gained further ground and touched a high of 71.85, registering a rise of 27 paise over its previous close.
On Wednesday, the rupee had settled at 72.12 against the US dollar.
However, the domestic unit could not hold on to the gains and was trading at 71.93 against the dollar at 0955 hrs.
Domestic bourses opened on a positive note on Thursday with benchmark indices Sensex trading 119.07 points higher at 36,843.81 and Nifty up 40.95 points at 10,885.60.
According to provisional exchange data, Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 1,738.49 crore on Wednesday.
Brent crude futures, the global oil benchmark, rose 0.07 per cent to trade at USD 60.74 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 98.48.
The 10-year government bond yield was at 6.58 per cent in morning trade.