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Indian rupee strengthened against the US dollar on Monday tracking inflow of foreign funds into capital markets. Foreign Institutional Investors were net buyers in the capital markets on Friday as they bought shares worth Rs 1,696.86 crore, exchange data showed. Market sentiments improved further after data showed that the seasonally adjusted HSBC India Services PMI Business Activity Index rose from 56.9 in November to 59 in December. While, India’s forex reserves zoomed up by $2.759 billion to $623.2 billion in the week ended December 29, the RBI said. Although, investors are cautiously awaiting US inflation report for more cues over the US Federal Reserve's interest rate outlook.

The partially convertible currency is currently trading at 83.08, stronger by 7 paise from its previous close of 83.15 on Friday. The currency touched a high and low of 83.1150 and 83.04 respectively.