The rupee appreciated 44 paise to 79.30 against the US dollar in the opening trade on Wednesday, mainly on account of foreign fund inflows.
Besides, a positive opening in the domestic equities amid moderating inflationary pressures boosted investor sentiments, according to forex dealers.
At the interbank foreign exchange, the rupee opened sharply up at 79.32 against the dollar, then gained further ground to 79.30, registering a rise of 44 paise over the last close.
In the previous session on Friday, the rupee depreciated 12 paise to close at 79.74 against the US dollar.
Forex markets were closed on Monday and Tuesday for Independence Day and Parsi New Year, respectively.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.06 per cent to 106.44.
Meanwhile, global oil benchmark Brent crude futures rose 0.34 per cent to $92.65 per barrel.
Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,376.84 crore, as per exchange data.
After turning net buyers last month, foreign investors have continued to invest in Indian equities and have pumped in Rs 22,452 crore in the first two weeks of August.