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Extending gains for a second day, the rupee rose by nine paise to close at 63.84 against the dollar, on persistent selling of the American currency by banks and exporters on hopes of foreign capital inflows amidst a strong capital market.
Weakness of the dollar in the foreign market also boosted the rupee value against the dollar, forex dealers said.
The rupee resumed lower at 64.03 against its previous closing level of 63.93 at the interbank foreign exchange market, and slid further to 64.05 on initial dollar demand from banks and importers amid foreign capital outflows.
However, it recovered immediately to 63.78, on selling of dollars by banks and exporters before concluding at 63.84 a dollar.
In the foreign market, the dollar weakened against major currencies on Tuesday, adding to losses from Monday’s session, as uncertainty about a US Federal Reserve rate rise lingered.
The dollar was sent sharply lower against the yen today after comments from Bank of Japan Governor Haruhiko Kuroda, who suggested the Japanese currency won't fall further as the real effective exchange rate is already "very weak".
The dollar index was trading lower by 0.15 per cent against its major global rivals today.
Meanwhile, the benchmark BSE Sensex ended higher by 359.25 points or 1.36 per cent.
