The rupee appreciated 6 paise to 73.52 against the US dollar in opening trade on Wednesday, despite weak equities and fund outflows. Forex dealers said lower crude prices helped the domestic unit to strengthen its ground.
However, a strong dollar against major currencies overseas restricted the rupee's gain, they added.
The domestic unit opened slightly lower at 73.59 in the interbank forex market, but soon recovered to quote 73.52 against the US dollar, rising 6 paise over its previous close.
On Tuesday, the rupee depreciated 20 paise to settle at 73.58 against the US dollar.
On the equities front, global markets were also mixed today the potential worsening of the coronavirus pandemic. Market benchmarks Sensex and Nifty reversed from early gains and fell for the fifth consecutive session on Wednesday, amid weak global cues. Sensex was falling 189 points lower at 37,544 and Nifty declined 70 points to 11,083.
The dollar index, which gauges the greenback's strength against a basket of six currencies, climbed 0.19 per cent to 94.16.
Dollar climbed to a near two-month high, after Chicago Federal Reserve President Charles Evans warned that the economy risks a longer, slower recovery and recessionary dynamics if Congress fails to pass an additional fiscal stimulus package.
He added that economy had shown marked improvement since the pandemic drove it into recession, but the path ahead remains uncertain and the U.S. central bank will do more if needed.
Brent crude futures, the global oil benchmark, slipped 0.74 per cent to USD 41.41 per barrel. Oil price as worries regarding demand due to rising coronavirus cases persisted even though the tropical storm in Gulf of Mexico lost strength.
Foreign portfolio investors (FPIs) sold shares worth Rs 2,072.76 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 878.91 crore in the Indian equity market on 22 September, provisional data showed.
Worldwide, there were 317 lakh confirmed cases and 9.75 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.90 lakh and total coronavirus cases stood at 56.46 lakh as of Wednesday.