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The rupee rebounded from its all-time low, rising 6 paise to 88.70 against the US dollar in early trade on Friday amid a weaker greenback and hopes of an India-US trade deal breakthrough.

However, FII outflows, coupled with a rise in international crude oil prices limited gains for the local unit, according to forex traders.

At the interbank foreign exchange, the rupee opened at 88.72 before rising to 88.70, higher by 6 paise from its previous close.

The rupee had slipped 1 paisa to close at a fresh lifetime low of 88.76 against the American currency on Thursday.

"Markets await for RBI action on October 1 when the MPC announces its rate decision amidst a falling rupee and trade tariffs uncertainties. The overall outlook looks cautious, with market sentiment closely tied to foreign fund flows, global risk environment, and resolution of policy uncertainties between India and US," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The Indian team has returned from the US after holding trade talks with their American counterparts in New York.

Commerce and Industry Minister Piyush Goyal, who led the team, will be back on Friday. The team arrived in New York on Monday to hold talks over the proposed trade agreement between the two countries.

The talks are taking place at various levels, encompassing both trade and non-trade issues.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.17 per cent lower at 98.38.

Brent crude, the global oil benchmark, was trading 0.22 per cent higher at USD 69.57 per barrel in futures trade.

"Brent crude oil prices rose to USD 69.61 per barrel on Russia's extended fuel restrictions, falling US crude inventories, heightened geopolitical risk from Ukraine's attacks on Russia infrastructure and NATO's subsequent strong response," Bhansali said.

On the domestic equity market front, Sensex declines 329.66 points to 80,830.02 in early trade while Nifty was down 105.7 points to 24,785.15.

Foreign Institutional Investors offloaded equities worth Rs 4,995.42 crore on Thursday, according to exchange data. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)