After logging its biggest single-day fall in nearly two years on Wednesday, the rupee appreciated by 10 paise to 74.37 against the US dollar in opening trade on Thursday supported by positive domestic equities and weak American currency.
At the interbank forex market, the local unit opened at 74.38 against the US dollar, then inched higher to 74.37 against the greenback, registering a rise of 10 paise over its previous close of 74.47.
On Wednesday, the Indian rupee nosedived 105 paise to mark its biggest single-session drop in over 20 months against the US currency amid concerns over surging COVID-19 cases in the country.
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"The RBI could be present this Thursday to curb volatility and could cap losses," Reliance Securities said in a research note.
Meanwhile, Asian currencies were mostly lower and could cap gains, the note added.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 407.35 points higher at 50,069.11, and the broader NSE Nifty advanced 121.20 points to 14,940.25.
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Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.07 per cent to 92.38.
Brent crude futures, the global oil benchmark, fell 0.40 per cent to USD 62.91 per barrel.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 227.42 crore on Wednesday, according to exchange data.