The rupee strengthened against the US currency for the third straight session on Wednesday, closing 9 paise higher at 74.19 (provisional) amid a rally in domestic equities.
At the interbank forex market, the rupee opened at 74.16 and hit an intra-day high of 74.08 and a low of 74.24. It finally closed at 74.19, higher by 9 paise over its last close.
On Tuesday, the rupee had settled at 74.28 against the US dollar.
"It's another fairly slow day in terms of price action, rupee stayed right through the day and heads for the third consecutive daily gains. The reason behind the recent gain is the rally in domestic equities and inflows from series of IPOs this week," said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar further noted that all eyes will be on Friday's RBI's stance on liquidity management and outlook for coming quarters.
"Technically, spot USDINR is expected to trade with negative bias and one should see levels of 74.10 and 73.90 in the coming days while any level around 74.50 will be looked as fresh short-selling," he said.
Brent crude futures, the global oil benchmark, rose 0.01 per cent to USD 72.42 per barrel.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.01 per cent to 92.09.
On the domestic equity market front, the BSE Sensex ended 546.41 points or 1.02 per cent higher at 54,369.77, while the broader NSE Nifty advanced 128.05 points or 0.79 per cent to 16,258.80.
Meanwhile, foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 2,116.60 crore, as per exchange data.