The rupee rose 35 paise to 81.58 against the dollar in opening trade on Thursday, as the US currency fell from a recent peak.

The local unit began at 81.60 versus the dollar on the interbank foreign exchange, then fell to 81.58, a 35-paise gain from its previous close.

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The rupee fell below the 82-mark for the first time in midday trade on Wednesday before finishing 40 paise down at 81.93 versus the dollar.

As the US dollar recovered its footing, the sterling fell 0.8% to $1.0798 at mid-session in Asia, while the euro fell 0.6% to $0.9679.

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Since the government sold dollars to strengthen the yen for the first time in decades last week, the Japanese currency pair has remained over 145 per dollar. On Thursday, it was slightly lower at 144.31 per dollar. The Australian dollar fell 0.7% to $0.6478, while the New Zealand dollar fell 0.8% to $0.5685.

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According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee opened stronger on Thursday, tracking the overnight weakness of the dollar and treasury yields.

However, concerns about fiscal loosening and monetary tightening will keep the dollar supported and cap gains for the local currency.

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“Investors now await the RBI’s monetary policy committee’s decision on Friday, with growing expectations of a 50-basis points hike due to the pressure on the rupee from hefty interest rate hikes in the US,” Iyer noted.

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Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, increased 0.61% to 113.28. The global oil benchmark, Brent crude futures, declined 0.46% to USD 88.91 a barrel.

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The Sensex was trading 361.13 points, or 0.64%, higher at 56,959.41, while the Nifty was up 133.75 points, or 0.79%, at 16,992.35.

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Foreign institutional investors (FIIs) have sold shares worth a net Rs 2772.49 crore, whereas domestic institutional investors (DIIs) purchased shares worth a net Rs 2544.17 crore on September 28, as per provisional data available on the NSE.