Indian rupee, the currency benchmark surged 15 paise to 74.17 per dollar on Tuesday's opening trade, tracking positive domestic equities and weak US currency.
The domestic unit opened at 74.17 per US dollar at the interbank forex market, registering a gain of 15 paise over its previous close of 74.32 per dollar on Monday.
Forex traders said positive trend in the equity markets, weak American currency and sustained foreign fund inflows aided the rupee's movement.
"Optimism surrounding the US-China Phase 1 deal also lent support after both sides saw progress on trade issues and are committed to making the Phase 1 agreement reached in January a success," Reliance Securities said in a research note.
Further, Asian currencies have started stronger against the US dollar and could boost the domestic unit, the report added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.17 per cent to 93.14. Dollar was trading lower today as investors awaited release of US new home sales data and US central bank speech, scheduled today.
On the domestic equity market front, Sensex and Nifty extended gains for the third session on Tuesday, amid positive global equities. Earlier at the opening bell, the S&P BSE Sensex gained 150 points higher at 38,932. The Nifty 50 index traded 44 points up at 11,510.
Foreign portfolio investors (FPIs) bought shares worth Rs 219.07 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 335.64 crore in the Indian equity market on 24 August, provisional data showed.
Oil price moved higher after storms forced shutting down of more than half of the region's oil production but gains were capped on concerns over demand. Brent Crude futures, the global oil benchmark, rose 0.09 per cent to USD 45.17 per barrel.
India reported more than 60,000 cases for the seventh straight day, taking the death toll to 58,546 and total coronavirus cases stood at 31.67 lakh as of Tuesday. Worldwide, there were 238 lakh confirmed cases and 8.17 lakh deaths from COVID-19 outbreak.