The rupee appreciated by 8 paise to close at 82.50 (provisional) against the US dollar on Wednesday, as a positive trend in domestic equities and easing crude oil prices supported investor sentiments.
At the interbank foreign exchange market, the local unit opened at 82.48 against the American currency and finally settled at 82.50 (provisional) against the greenback, registering a gain of 8 paise over its previous close of 82.58.
During the trading session, the rupee touched a high of 82.36 and a low of 82.61 against the dollar.
The dollar index fell 0.39 per cent to 104.45.
Brent crude futures declined 0.41 per cent to $83.11 per barrel.
Rupee traded strong as the dollar faced hurdles near 105 along. Moreover, weakness in crude oil prices also supported the local unit, with WTI taking resistance at $77 per barrel, said Jateen Trivedi, VP Research Analyst at LKP Securities.
"Major strength was seen from the positive trend in capital markets, which led to gains for the rupee.
"US PMI data later in the evening can give further cues to dollars and other currencies," Trivedi said.
On the domestic equity market front, BSE Sensex advanced 448.96 points or 0.76 per cent to end at 59,411.08, while NSE Nifty rose 146.95 points or 0.85 per cent to 17,450.90.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 4,559.21 crore, according to exchange data.
India's economic growth decelerated to 4.4 per cent in October-December this fiscal year mainly due to a contraction in the manufacturing sector.
The GDP (Gross Domestic Product) growth was 11.2 per cent in October-December 2021 and 6.3 per cent in July-September 2022, showed the data released by the National Statistical Office (NSO) on Tuesday.