Shrugging off initial weakness, the rupee on Tuesday appreciated by 10 paise to close at 55.34 on the back of robust capital inflows and a weak dollar overseas.
The sentiment also favoured rupee as euro traded just below a three-and-a-half month high against dollar on optimism ahead of a German court ruling on a new EU bailout fund.
At the Interbank Foreign Exchange (Forex) market, the rupee resumed slightly weak at 55.46 a dollar against compared to the previous close of 55.44. It touched a low of 55.54 on sustained dollar demand from importers at initial stages.
However, rupee scripted a bounce back on the back of dollar selling by exporters and capital inflows worth Rs. 400 crore in Indian shares.
Thereafter, rupee touched a day’s high of 55.32 before concluding at 55.34, clocking a gain of 10 paise over Monday’s close.
The dollar index, consisting of six global currencies, was down by 0.22 per cent in late European market on Tuesday.