The rupee appreciated by 4 paise to 82.33 against the U.S. dollar in early trade on Wednesday, tracking positive sentiments in the domestic equity market and relatively weaker dollar against major currencies.
At the interbank foreign exchange, the domestic unit opened stronger at 82.32 against the U.S. dollar and then gained ground to 82.30. Later, it slipped to 82.33 against the greenback, registering a rise of 4 paise against its previous close.
On Tuesday, the rupee settled at 82.37 against the U.S. dollar.
Anand James, Chief Market Strategist at Geojit Financial Services, said there could be slippage to 82 level. "It would require consistent trades above 82.36 to rekindle positivity again."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.10% lower at 103.49.
Global oil benchmark Brent crude futures rose 1.21% to $78.39 per barrel.
The 30-share BSE Sensex was trading 403.21 points or 0.70% higher at 58,303.40 points while the broader NSE Nifty was up 130.40 points or 0.77% to 17,173.70 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth ₹3,086.96 crore, according to exchange data.
Expectations of slower interest rate hike by the U.S. Federal Reserve on the back of lower inflation also boosted the overall sentiment.
In February, the U.S. consumer price index came in largely in line with expectations at 6%.
On the domestic front, the wholesale price-based inflation declined to 3.85% in January on easing prices of manufactured items, fuel and power, even though food articles remained expensive.