The rupee trimmed its initial gains, but was still up by 5 paise to 65.22 per dollar in late morning deals on bouts of dollar selling by banks and exporters amid lower dollar overseas.
Earlier, the domestic unit resumed higher at 65.13 per dollar as against yesterday's level of 65.27 at the Interbank Foreign Exchange (Forex) market.
It moved in a range of 65.26 and 65.12 before quoting at 65.22 per dollar at 1030hrs, still showing a rise of 5 paise.
The dollar index was down by 0.10 per cent at 96.36 against a basket of six currencies in the early trade.
"The dollar fell against most currencies on the back of dovish July FOMC minutes. Lower than expected inflation data in US has cast doubts about Fed rate hike next month," a dealer said.
"Stability of Yuan at lower levels after a bout of near 5 per cent depreciation has helped Asian currencies and rupee to stem further depreciation against dollar. The USD-INR pair is expected to trade today in a range of 64.90-65.25 per dollar," he added.
Oil prices fell to a fresh 6-1/2 year low in Asia today approaching the key USD 40 a barrel level after a surprise rise in US inventories added to concerns of a supply glut.
In New York, the dollar tumbled yesterday after minutes from the July meeting of Federal Reserve policy makers showed that they may not be ready to raise interest rates in September.
Meanwhile, the benchmark 30-share index was trading lower by 36 pts, or 0.13 pct, at 27,895.32 at 1035hrs.
