Dealers said the Indian forex market is keenly awaiting the decision of the ongoing US Fed Reserve meeting.
Weak dollar overseas also aided the rupee surge while sluggish local equities somewhat restricted the rise.
The dollar index was down by 0.14 per cent against a basket of six major global currencies.
At the Interbank Foreign Exchange market, the domestic currency resumed higher at 60.35 a dollar from last close of 60.42. It moved in a narrow range before ending at 60.31, a net gain of 11 paise. Yesterday, it had gained by 23 paise
FIIs picked up shares worth Rs 287.98 crore yesterday, as per provisional data with stock exchanges.
The benchmark BSE Sensex, meanwhile, declined by 48.39 points in choppy trade.
Pramit Brahmbhatt, Veracity Group CEO, said: "The rupee appreciated for the second consecutive day. The positive start for local equities and heavy dollar selling by exporters and corporates, helped the rupee to trade strong."
The benchmark six-month premium payable in October dipped to 225-227 paise from 240-242 paise previously.
Far forward contracts maturing in April, 2015 finished 454-456 paise against 476.5-478.5 paise previously.
The Reserve Bank of India fixed the reference rate for dollar at 60.33 and for the euro at 83.30.
The rupee improved further against the pound to 101.48 from last close of 101.54 and also strengthened against the euro to 83.54 from 83.72. It, however, closed stable at its overnight level of 58.83 per 100 Japanese yen.
NOTE: The Forex and Money markets will remain closed tomorrow, May 1, on account of 'Maharashtra Day'.