Mumbai: The rupee appreciated by 23 paise to 68.74 against the US dollar in early trade Friday, as market participants pinned their hopes on aggressive interest cut by the US Federal Reserve later this month.

Forex traders said rupee along with most Asian currencies were trading in the positive territory following dovish comments from both New York Fed President John Williams and Vice Chair Richard Clarida.

The rupee opened strong at 68.78 at the interbank forex market then gained further ground to touch 68.74 per dollar, displaying gains of 23 paise over its last close.

On Thursday, the rupee had settled at 68.97 against the US dollar. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 96.81.

Traders said foreign fund outflows and cautious opening in domestic equities weighed on the local unit. Foreign investors sold shares worth Rs 1,404.86 crore on a net basis on Thursday, provisional data showed.

The benchmark BSE Sensex was trading 221.24 points, or 0.57 per cent down to quote at 38,706.82 while the NSE Nifty was trading at 11,529.00 , down 67.90 points, or 0.59 per cent.

Meanwhile, brent crude, the global benchmark, was trading at 63.18 per barrel higher by 2.02 per cent.