In commodity markets, U.S. oil futures hit their highest in over a month as a potential hurricane threatened crude output in the Gulf of Mexico. However, it pared some losses to touch a high of 68.48, before finally closing at 68.58, showing a loss of 7 paise over its previous close.
At 09:10 AM, the rupee was trading at 68.36 a dollar, up 22 paise from its Wednesday's close of 68.58. Any level below 68.50 could bring momentum buying in rupee against dollar.
"Rupee has been consolidating in the range of 68.50 and 69.20 for last five sessions".
The rupee opened higher against the US dollar on Thursday, as the American currency took a back seat after US Federal Reserve Chairman Jerome Powell signalled that a rate cut could be coming soon.
Mr Powell told Congress that "uncertainties about the outlook have increased in recent months" and that ongoing "concerns about the strength of the global economy continue to weigh on the USA outlook".
However, strong U.S.jobs data on Friday all but ended expectations of a bold interest rate cut from the Fed at its meeting this month, leaving investors in search of hints on where rates are headed.
A weak trend at the domestic equity markets and global trade tensions also kept sentiment subdued, traders said.
Meanwhile, foreign institutional investors (FIIs) pulled out a net Rs 604.94 crore on Wednesday, provisional data with the exchanges showed.
The dollar index, which measures the United States currency's strength against a basket of major currencies, was at 96.906, down 0.2% from its previous close of 97.104. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent, while Japan's Nikkei added 0.15 per cent, and South Korea's KOSPI climbed 0.7 per cent.
Brent crude futures, the global oil benchmark, rose 0.36 per cent to United States dollars 67.25 per barrel amid reduced USA inventories and geopolitical tensions.
There was a rub-off on the government bonds as well, with the 10-year bond gaining slightly to 6.555% yield to an earlier rate of 6.544%.