The Indian rupee appreciated by 21 paise to 70.70 against the US dollar in early trade on Thursday as easing crude prices strengthened investor sentiments.
Trading in emerging market currencies was subdued after British Prime Minister Boris Johnson lost the crucial Brexit Bill timetable vote.
Besides, markets are also awaiting fresh cues on the potential US-China trade deal, they added.
At the interbank foreign exchange the rupee opened at 70.79, then gained further and touched a high of 70.70, registering a rise of 21 paise over its previous close.
On Wednesday, rupee had settled at 70.91 against the US dollar.
The domestic unit however could not hold on to the gains and was trading at 70.87 against the dollar at 1006 hrs.
Domestic bourses opened on a cautious note on Thursday with benchmark indices Sensex trading 37.52 points higher at 39,096.35 and Nifty higher by 1.15 points at 11,605.25.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.06 per cent to 97.43.
Market participants, however, said sustained foreign fund outflows weighed on local currency.
Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 213.23 crore on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.47 per cent to trade at USD 60.88 per barrel.
The 10-year government bond yield was at 6.52 per cent in morning trade.