The rupee closed higher by 16 paise at 63.92 against the American currency on fresh selling of dollars by banks and exporters due to weakness of the greenback in the overseas market.
The rupee resumed higher at 63.97 as against last closing level of 64.08 at the Interbank Foreign Exchange (Forex) and hovered in a range of 63.8625 and 64.01 before concluding at 63.92, registering a gain of 16 paise or 0.25 per cent.
The local currency had dropped by 33 paise or 0.52 per cent yesterday.
Fresh selling of dollars by banks and exporters in view of lower dollar in the overseas market mainly boosted the rupee value against the dollar, a forex dealer said.
In the global market, the dollar has lost gains made after better-than-expected jobs data amid concern that the US government will take steps to limit an advance, underpinned by the prospect of the Federal Reserve raising interest rates.
The dollar index was trading marginally higher by 0.06 per cent against its major global rivals today.
Meanwhile, the benchmark BSE Sensex declined further by 41.84 points, or 0.16 per cent, to settle at 26,481.25.
In the forward market, the premium for dollar moved down further on sustained receipts from exporters.
The benchmark six-month premium payable in November moved down further to 213.5-215.5 paise from 215-217 paise yesterday and forward contracts maturing in May 2016 also fell to 436.5-438.5 paise from 438-440 paise.
The RBI fixed the reference rate for the dollar at 63.9360 and for the euro at 72.3692.
The rupee fell against the pound sterling to 97.89 from yesterday’s closing level of 97.70 and also moved down against the euro to 72.05 from 71.14 previously.
The domestic currency fell further against the Japanese unit to 51.55 per 100 yen from 51.14 yesterday.