The US dollar index, which measures the greenback s strength against a basket of six currencies, eased by 0.02% to 101.94. The 10-year US Treasury yields fell below the 4% level on Thursday following signals by the US Federal Reserve to cut rates next year.
At the interbank foreign exchange market, the local unit opened at 83.36 against the greenback. The rupee touched the intra-day peak of 83.35 before trading at 83.36 against the American currency, up 1 paise from its previous close.
The Indian rupee settled little changed on Monday, supported by likely U.S. dollar sales by the Reserve Bank of India (RBI) while rupee forwards premiums retreated amid a rise in U.S. bond yields.
The local unit is likely to see "steady depreciation," but a sharp rise will be tough amid central bank intervention, Dilip Parmar, a foreign exchange research analyst at HDFC Securities said.
The Indian rupee closed slightly lower on Friday, tracking subdued moves in its Asian peers, as investors turned their attention to a crucial U.S. labour market report due later in the day.