The rupee appreciated 14 paise to 74.28 against the US dollar in early trade on Tuesday, as a positive trend in domestic equities and weak American currency strengthened investor sentiments.
Besides, fresh foreign fund inflows also supported the domestic unit, forex dealers said.
At the interbank forex market, the rupee opened strong at 74.34 and strengthened further to 74.28, showing a gain of 14 paise over its previous close.
On Monday, the rupee settled at more than two-month low of 74.42 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14 per cent to 94.01.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 416.44 points higher at 40,174.02, and the broader NSE Nifty rose 121.80 points to 11,790.95.
Foreign institutional investors emerged as net buyers in the capital market as they purchased shares worth Rs 740.61 crore on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, declined 0.08 per cent to USD 38.94 per barrel.
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