The rupee snapped 5-day losing streak against the American currency, ending higher by 20 paise to 63.64 per dollar on fresh selling of dollars by banks and exporters on hopes of resumption of foreign capital inflows in view of recovery in the equity market.
The rupee opened higher at 63.76 per dollar at the Interbank Foreign Exchange (Forex) Market compared to 63.84 a dollar previously and firmed up further to 63.6350 per dollar before ending at 63.64 per dollar, showing a gain of twenty paise or 0.31 per cent.
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The rupee had gained by 32 paise or 0.50 per cent in the last five trading days.
The domestic unit moved in a range of 63.80 and 63.6350 per dollar during the day.
The dollar index was trading higher by 0.21 per cent agaisnt its major global rivals on Tuesday.
At overseas, the euro narrowed losses against the US dollar on Tuesday, with investors keeping watch on developments in Greece.
Greece's bailout program is expected to expire on Tuesday. As well, the debt-burdened country was expected to miss a 1.6-billion-euro ( 1.7 billion) debt repayment due to the International Monetary Fund due the same day.
Meanwhile, the Indian benchmark sensex snapped its last 2-day losing streak, recovering 136 points or 0.49 per cent to close at 27,780.83 on the back of higher Asian cues.
Pramit Brahmbhatt, Veracity Group CEO, said, "The rupee traded strong and appreciated by over quarter per cent for the day to close at 63.64. The fresh selling of the US currency by exporters and banks supported the rupee. Also the local equities traded positively for the day which further supported the rupee to appreciate twenty paise for the day."
The trading range for the Spot USD/INR pair is expected to be within 63.30 to 64.00.
In the forward market, the premium eased further on sustained receivings from exporters.
The benchmark six-month premium payable in November eased further to 188.5-190 paise from 189-191 paise on Monday and maturing in May, 2016 contract also moved down to 414.5-416.5 paise from 415-417 paise previously.
The RBI fixed the reference rate for the dollar at 63.7549 and for the euro at 71.2015.
The rupee recovered against the pound sterling to 100.05 from 100.29 previously while dropped against the euro to 71.20 from 70.97 previously.
The domestic unit eased further against the Japanese unit to 51.96 per 100 yen from 51.95 previously.
