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The Indian rupee rose against the dollar on Monday as the greenback declined against its major peers, while forward premiums added to last week's surge.

The rupee last traded at 82.6950 per U.S. dollar, up from 82.87 in the previous session. The local currency had opened at 82.81.

There were decent dollar offers through the day, probably on account of a pickup in forward dollar sales and speculative positions, a trader at a private bank said.

"Rupee is expected remain in a range of 82.20 to 82.90 in the next four days," said Anil Bhansali, head treasury at Finrex Treasury Advisors. "Positioning is generally on the long dollar side."

The rupee and other Asian currencies were helped by the dollar's weakness against its major peers. The dollar index fell 0.5% to 104.30.

The dollar has struggled on bets that the U.S. Federal Reserve is close to halting is rate hike cycle. Fed futures are pricing in a terminal rate of below 5% by the middle of next year. Last week, the Fed raised rates by 50 basis points to 4.25%-4.50%.

Market expectations about the peak Fed fund rate has not moved higher despite hawkish comments from Fed policymakers. Investors reckon that growth concerns will prompt the U.S. central bank to pivot to rate cuts in the later half of 2023.

The dollar index is down over 9% from year-to-date highs. The rupee has been an underperformer relative to its Asian peers in the dollar's pullback.

The USD/INR forward premium added to last week's surge with the 1-year implied yield rising to 2.06%, the highest in over three weeks.

The sell/buy swaps by foreign banks in far forwards and stop losses pushed premiums higher on Monday, according to traders.