The Indian rupee pared initial losses to close 13 paise higher at 71.53 against the US dollar on Wednesday as sentiment revived after reports suggested the US-China deal is nearing.
Forex traders said market participants are hopeful that the Reserve Bank will go for another rate cut in the RBI policy meet on Thursday. Besides, the rupee also got support from foreign fund inflows in primary equity market.
At the interbank foreign exchange, the rupee opened weak at 71.76 against the US dollar. During the day, the domestic unit touched a high of 71.53 and a low of 71.81.
The local unit finally settled for the day at 71.53 against the US dollar, higher by 13 paise over its previous closing.
The Indian rupee on Tuesday had closed at 71.66 against the US dollar.