The rupee appreciated 21 paise to settle at 73.55 (provisional) against the US dollar on Thursday as positive domestic equities and sustained foreign fund inflows strengthened investor sentiment.
Traders said the weakness of the American currency against key rivals also supported the rupee.
At the interbank forex market, the domestic unit opened at 73.66 against the US dollar and witnessed an intra-day high of 73.54 and a low of 73.66.
The local unit finally closed at 73.55 against the American currency, registering a rise of 21 paise over its previous close.
On Wednesday, the rupee had settled at 73.76 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.20 per cent to 90.23.
On the domestic equity market front, the BSE Sensex ended 529.36 points or 1.14 per cent higher at 46,973.54, while the broader NSE Nifty jumped 148.15 points or 1.09 per cent to 13,749.25.
Foreign institutional investors were net buyers in the capital market, as they purchased shares worth Rs 536.13 crore on a net basis on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.35 per cent to USD 51.02 per barrel.
