Indian rupee, the domestic currency benchmark, rose 15 paise to 74.59 per dollar on Wednesday tracking positive Asian currencies and improvement in investors' risk appetite.
At the interbank forex market, the domestic unit opened at 74.61 per dollar and later gained further ground to touch 74.59, registering a gain of 15 paise over its previous close of 74.74 per dollar on Tuesday.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 per cent to 95.13.
"Asian currencies were stronger against the US dollar this morning and could lift sentiments for the local unit," Reliance Securities said in a research note, adding that "the currency could also be supported by more stimulus measures to mitigate the economic blow from the pandemic".
Moreover, hopes of COVID-19 vaccine also improved sentiments.
Several scientists in India and abroad said that the coronavirus vaccine developed by Oxford University and AstraZeneca shows promise as it can generate both antibodies and cell-mediated immune responses.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 62.63 points lower at 37,867.70 and broader NSE Nifty fell 14.90 points to 11,147.35.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,265.88 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, slipped 0.50 per cent to USD 44.10 per barrel.
Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.49 crore and the death toll has topped 6.16 lakh.
In India, the death toll due the disease rose to 28,732 and the number of infections has touched 11,92,915, according to the health ministry.
(With PTI Inputs)