Snapping its two-day downtrend, the rupee today managed to cross over to positive territory by finishing at 64.37, up by a marginal one paisa in a cautious trade on a day domestic equity markets scripted history.
Besides, weak US dollar overseas along with abundant capital inflows into domestic equities largely supplemented strength to the local currency.
Currency traders and speculators preferred to stay on the sidelines as attention shifted towards the US Federal Reserve's policy statement with regards to rate hikes.
The home currency resumed lower at 64.43 as compared to the Tuesday's closing of 64.38 at the Interbank Foreign Exchange (forex) market.
It weakened further to hit an intra-day low of 64.45 in late morning deals due to month-end dollar demand from importers.
However, reversing its downtrend, the domestic unit staged a smart recovery towards the fag-end trade to touch a fresh high of 64.35 before settling at 64.37, showing a gain of one paisa.
It had lost 6 paise in the last two days.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.4208 and for the euro at 74.9214.
In cross-currency trades, the rupee remained under immense pressure against the pound sterling and finished at 84.07 from 83.96 per pound but rebounded against the euro to end at 74.96 as compared to 75.05 earlier.
The local currency also firmed up further against the Japanese yen to close at 57.61 per 100 yens from 57.77 yesterday.
The US dollar is lacking momentum ahead of the Federal Open Market Committee (FOMC) meet outcome and traded little changed against major world currencies while US political woes continue.
Unwinding of dollar short positions by speculative traders ahead of the policy event also supported the rupee.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 270.77 crore yesterday.
It was an historic moment for Indian markets as confident investors propelled the NSE-benchmark Nifty to close above the historic 10,000 mark for the first time, while the nation's most widely watched stock index Sensex conquered another record high of 32,382.46.
The stock markets have been on a roll and hitting multiple records this year amid optimism over government reform measures and expectations of healthy quarterly results.
On the global front, the dollar struggled to regain ground against a basket of currencies ahead of FOMC meet outcome, with markets paying close attention to details of when and how the US Federal Reserve will start reducing its USD 4.5 trillion balance sheet.
The dollar index, which measures the greenback against a basket of currencies, was down at 93.92 during Asia trade.
In forward market today, premium for dollar edged lower owing to persistent receipts by exporters.
The benchmark six-month premium payable in December eased to 123-125 paise from 124-126 paise and the far-forward June 2018 contract also moved down to 268.5-270.5 paise from 270-272 paise.
On the International commodity front, crude prices rallied for the third-straight session on Wednesday to trade above the psychological USD 50-mark following a fall in US inventories bolstered expectations that the long over-supplied market was moving toward balance.
The brent crude futures were up 17 cents to USD 50.37 a barrel in early Asian trade. Both contracts rose to near eight-week highs earlier in the session.
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