The rupee traded higher in afternoon session on Wednesday as gains in domestic equities raised hopes of more capital inflows and higher Asian units also underpinned sentiment.
At 1:20 p.m., the partially convertible rupee was at 47.66/67 per dollar, stronger than its Tuesday's close of 47.88/90.
Most Asian currencies were stronger versus the dollar as investors cheered fresh indications that the global economy may be on the mend.
Indian shares were trading 3 percent higher after U.S. consumer confidence showed its biggest monthly jump in six years, fuelling a Wall Street rally and strengthening investor confidence across Asia.
However, dealers said the dollar's strength versus other major currencies and month-end dollar demand from importers and refiners, was capping the rupee's gains. The dollar index, an indicator of the U.S. unit's performance against six majors, was up 0.1 percent.
In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX were quoting at 47.63 and 47.635 respectively, with the total traded volume on both exchanges at about $951 million.
