Forex dealers said some foreign fund flows and weakening of dollar overseas also aided the local currency to some extent. The rupee commenced strong at 54.46 against the dollar from its previous closing of 54.58 at the Interbank Foreign Exchange (Forex) market.
It moved in a range of 54.40-54.57 before settling at 54.51, up seven paise, or 0.13% from its previous closing.
Bonds edge down
Bonds edged lower as traders made room for the upcoming auction of 2025 paper and investors booked profits after the 10-year yield dropped sharply in last three sessions.
The benchmark 10-year bond yield closed up 2 basis point at 7.9%.