The rupee was trading strong at 67.85 as exporters and banks intensified selling of the US currency amid a strong domestic equity market.
Forex dealers said the dollar’s weakness against other currencies too influenced the rupee uptrend.
The domestic unit opened higher by 14 paise at 67.96 at the Interbank Foreign Exchange market today.
It hovered in a range of 67.99 and 67.85 before quoting at 67.85, up 25 paise at 4.25 pm local time.
Yesterday, the local unit had recovered by 14 paise to close at 68.10 on fresh selling of the greeenback in view of its weakness overseas amid a revival in domestic equities.
The Sensex and Nifty jumped 1 per cent in the last trading session of 2016, recovering from recent losses and ending a volatile year with gains despite fears of outflows from emerging markets and cash crunch in the domestic economy post-demonetisation.
The NSE index rose 82.2 points or 1.01 per cent to 8,185.80, while the BSE index gained 260.31 points or 0.99 per cent to 26,626.46.
In the overseas market, the euro jumped to its highest in three weeks in thin Asian trade on Friday, but was on track for a losing year on expectations that US President-elect Donald Trump’s policies will boost inflation and prompt the US Federal Reserve to hike interest rates more frequently.
On the last trading day of 2016, the dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.3 per cent to 102.40, below its high of the year of 103.65 touched on December 20, which was its highest level since January 2003. But it was still poised to gain 3.8 per cent for the year.