The rupee strengthened by 18 paise against the US dollar in early trade on Monday, reaching 82.77, supported by robust performance in domestic equities that reached record highs.In the interbank foreign exchange market, the rupee opened at 82.82 and touched 82.77 against the US dollar in initial trade, marking a gain of 18 paise from its previous close.

At the interbank foreign exchange, the domestic currency opened at 82.82 and touched 82.77 against the greenback in initial trade, registering a rise of 18 paise from its previous close. On Friday, the rupee strengthened for the eighth consecutive session to settle with a gain of 6 paise to 82.95 against the US dollar.

"Keep a close watch on what the Reserve Bank of India does during the day," Anil Kumar Bhansali, the Head of Treasury and Executive Director Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 102.35.

Global oil benchmark Brent crude was at $78.54 per barrel.

"Monday's US holiday is likely to result in decreased trading activity, potentially dampening market volatility. This development hints at positive trends for emerging market currencies amidst reduced holiday trading activity," said CR Forex Advisors MD Amit Pabari.

US stock exchanges are closed on Monday on account of Martin Luther King, Jr. Day.

In the domestic equity market, the 30-share BSE Sensex was trading 707.03 points, or 0.97 per cent, higher at 73,275.48 points. The broader NSE Nifty advanced 178.40 points or 0.81 per cent to 22,072.95 points.