The rupee shot up for second day in a row by 35 paise to close at more-than two-week high of 63.03 against the Greenback following firm local equities amid sustained dollar selling by exporters.
Capital inflows and slight weakness in USD overseas also supported the rupee rise, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 63.31 a dollar from previous close of 63.38, and logged a low of 63.38 on initial weakness in local stocks .
Later, it bounced back on rally in domestic equities and sustained dollar selling by exporters to settle at the day's high of 63.03. Previously, it had concluded at 62.94 on December 15, 2014.
The Indian benchmark S&P BSE Sensex firmed up by 95.88 points or 0.35 pct while FPIs injected $44.20 mln on Tuesday, as per Sebi data.
The dollar index was down by a mere 0.02 pct against its major global rivals.
Mr.Pramit Brahmbhatt, Veracity Group CEO said,"Indian Rupee traded strong for consecutive second day and closed half percent positive taking cues from local equities which traded positive for the day. We have seen some dollar selling through exporters and also the dollar index is not able to sustain above 90 levels, which support rupee to strong further. The trading range for the Spot rupee is expected to be within 62.70 to 63.40."
In the forward market, premia fell back on fresh receivings by exporters.
The benchmark six-month premium payable in May dipped to 190.5-192.5 paise from Tuesday's close of 192-194 paise.
Forward contracts maturing in November 2015 also moved down to 395-397 paise from 400.5-402.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 63.3315 and for Euro at 77.0048.
The rupee gained further to 98.30 against the pound from 98.44 and also firmed up to 76.58 per euro from 77.08.
It also strengthened to 52.79 per 100 Japanese yen from 52.99 on Tuesday.