MUMBAI: The rupee appreciated 29 paise to 94.62 against the US dollar in early trade on Wednesday, supported by positive sentiments in the domestic market and support from the RBI.
Besides, the rupee got a boost from the foreign dollar inflows tied to the Jio IPO, which opened for public subscription on Wednesday, according to analysts.
However, elevated crude oil prices and a firm US dollar capped the gains.
At the interbank foreign exchange market, the rupee opened stronger at 94.78, and then gained further ground to touch 94.62 against the American currency, registering a gain of 29 paise from its previous close.
On Monday, the rupee settled lower by 2 paise at 94.91 against the US dollar.
The forex market was closed on Tuesday on account of Dussehra.
''This strength is primarily underpinned by foreign dollar inflows tied to the Jio IPO alongside support from the Reserve Bank of India (RBI). To navigate dollar flows during the IPO allotment process, foreign investors are largely relying on sell/buy swaps—offloading dollars for rupees in the spot market while contracting to repurchase them within a short window, usually under a week," said Aamir Makda, Commodity & Currency Analyst , Commodity Technical Research at Choice Broking.
Despite these positive drivers, elevated oil prices remain a significant headwind for the domestic currency, he added.
"Over the course of today's session, the rupee is expected to consolidate within a trading band of 94.00 to 94.75 against the dollar," Makda said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.58 , up marginally by 0.06 per cent.
Brent crude, the global oil benchmark, was trading up 1.42 per cent at USD 110.33 per barrel in futures trade.
In the domestic equity market, the Sensex climbed 665.10 points to 74,518, while the Nifty rose 188.40 points to 23,077.35.
Foreign Institutional Investors (FIIs) sold equities worth Rs 1,148.64 crore on a net basis on Monday, according to exchange data.
