The rupee recovered from initial losses to settle 11 paise higher at 71.43 against the US currency on Wednesday, tracking gains in domestic equity markets and softening crude oil prices.
Foreign fund inflows also supported the local currency, forex trader said.
At the interbank foreign exchange market, the rupee opened at 71.60 against the US dollar. During the day, the domestic unit fluctuated between a high of 71.36 and a low of 71.71.
On Tuesday, the domestic unit had settled at 71.54.
“Strong equity markets, FII inflows, lower Brent crude prices and ICE Dollar Index helped the rupee recoup some of the losses seen on the previous day,” said V K Sharma, Head - PCG & Capital Market Strategy, HDFC securities.
Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they infused Rs 686.33 crore on Tuesday, exchange data showed.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.05 per cent to 98.34.