The rupee appreciated 13 paise to 75.45 against the US dollar in early trade on Tuesday tracking weakness in the greenback and gains in the domestic equity market.
Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising COVID-19 cases weighed on investor sentiment.
The rupee opened at 75.48 against the US dollar, then gained further ground and touched 75.45 against the US dollar, up 13 paise over its previous close.
It had settled at 75.58 against the greenback on Monday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07 per cent to 97.46.
The 30-share BSE benchmark Sensex was trading 152.30 points higher at 35,113.82 and broader NSE Nifty rose 51 points to 10,363.40.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 1,937.06 crore on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.62 per cent to USD 41.45 per barrel.
Meanwhile, the number of cases around the world linked to the disease has crossed 1.02 crore and the death toll has topped 5.04 lakh.
In India, the death toll due to COVID-19 rose to 16,893 and the number of infections spiked to 5,66,840, according to the health ministry.