Rising for the first time in five sessions, the Indian rupee on Tuesday appreciated by 29 paise to close at 63.38 against the greenback following fresh US dollar selling by exporters and foreign fund inflows in domestic debt.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed lower at 63.72 a dollar from the last close of 63.67.
The rupee then declined further to a low of 63.79 on some weakness in local stocks and month-end dollar demand from importers, mainly oil refiners.
Later, the rupee bounced back on fresh dollar selling by exporters and some banks to a high of 63.3550 before ending at 63.38, showing a rise of 29 paise or 0.46%.
In the previous four straight sessions, the Indian currency had dipped by 47 paise or 0.74%.
Meanwhile, the Indian equity benchmark S&P BSE Sensex on Tuesday survived to settle in the positive terrain and closed 7.81 points higher. Foreign Portfolio Investors sold shares worth $34.28 million on Monday, as per Sebi data.
Pramit Brahmbhatt, CEO of Veracity Group CEO, "The Indian rupee traded strong for the day and closed positive after four days of fall.
"We have seen some foreign investors buying in domestic debt and even the dollar index fell in the evening session today (Tuesday) which helped the rupee to strengthen further. The trading range for the spot rupee is expected to be within 63-63.70."
In the forward market, premia improved further on sustained pressure from banks and corporates.
The benchmark six-month premium payable in May moved up to 192-194 paise from the last close of 190.5-192.5 paise.
Forward contracts maturing in November 2015 also rose to 400.5-402.5 paise from 397.5-399.5 paise.
The Reserve Bank of India fixed the reference rate for the dollar at 63.7498 and for euro at 77.3221.
The rupee improved further to 98.44 against the pound from 98.92 and also strengthened to 77.08 per euro from 77.59.
It, however, fell back to 52.99 per 100 Japanese yen from 52.63 on Monday.