The rupee declined 6 paise to 96.31 against the US dollar in early trade on Thursday amid volatility in global crude oil prices and a stronger greenback with the West Asia crisis showing no signs of abating.

FII outflows continued to weigh on the local unit while a positive start to the day at the domestic equity markets provided support, according to forex traders.

At the interbank foreign exchange, the rupee opened at 96.28 against the greenback before slipping further to 96.31 from its previous close.

The local unit had on Wednesday extended its slide for the third straight day and settled 9 paise lower at 96.25 against the US dollar.

The United States intensified its strikes targeting Iran early on Thursday, hitting targets further north as American forces also fired into a ship it accused of trying to break its naval blockade on the Islamic Republic. Iran retaliated with missile and drone fire targeting Bahrain and Kuwait before dawn.

Days of back-and-forth strikes by the US and Iran across West Asia -- and renewed threats to the Strait of Hormuz -- have shredded the interim deal to end the Iran war and could tip the region back into all-out war. Jordan's military said in the morning that it shot down eight missiles launched by Iran targeting the kingdom.

"The rupee opened at 96.28 despite the dollar index depreciating while Brent oil prices are nearer to USD 85 per barrel, indicating inherent dollar demand that the currency pair is showing," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally up by 0.01 per cent at 100.49.

Brent crude, the global oil benchmark, remained volatile and at the time of filing this report was trading 0.31 per cent down at USD 84.69 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 185.77 points to 77,400.40 in early trade while the Nifty was up 42.15 points to 24,132.60.

Foreign Institutional Investors on Wednesday offloaded equities worth Rs 735.83 crore in the domestic equity market, according to exchange data.