The rupee ended higher by 9 paise at 63.85 against the American currency on persistent selling of dollars by banks and exporters on hopes of resumption in foreign fund inflows amid rise in equity market.
However, higher dollar in the global market after strong US jobs data announced last weekend and continued capital outflows, restricted the gains, analysts said.
The euro fell against the dollar and yen in Asia today as jittery investors await the outcome of the Eurogroup finance ministers meeting on Greece in Brussels later today.
Rising for the second straight day, the domestic currency at the Interbank Foreign Exchange (Forex) market, resumed better at 63.85 a dollar and ended at the same level after moving in a range of 63.77 and 64.01, registering a gain of 9 paise or 0.14 per cent.
It has gained 38 paise or 0.59 per cent in the last two days.
Meanwhile, the benchmark BSE Sensex today ended with a gain of 401.91 points or 1.48 per cent.
The foreign portfolio investors (FPIs) sold shares worth Rs 437.56 crore last weekend, according to a provisional data.
The dollar index, a gauge of six other major global rivals, was trading higher by 0.25 per cent.
In the forward market, the premium dropped further on sustained receivings by exporters.
The benchmark six-month premium payable in October moved down further to 217-219 paise from 225.5-223.5 paise on last Friday.
Forward contracts maturing in April 2016 fell to 435-437 paise from 439.5-441.5 paise. The Reserve Bank of India fixed the reference rate for dollar at 63.8495 and for the euro at 71.5114.
The rupee dropped further against the pound sterling at 98.81 from 98.68 previously while firmed up further against the euro to 71.13 from 71.76.
However, it fell against the Japanese currency to 53.65 per 100 yen from 53.24 yesterday.
