The rupee on Tuesday opened higher against the US currency and rose further on good inflows into the stock market along with weak dollar against euro.
In restricted activity at the Interbank Foreign Exchange (Forex) market in Mumbai, the Indian unit started firm at Rs 46.1150/1250 per dollar from Monday's close of Rs 46.1350/1450 and rose further to Rs 46.1025/1125 during the course of trading, higher than the previous close.
Meanwhile, dollar declined against its European rivals, especially euro, after losing some ground late in the North American session on the back of a steeper-than-expected drop in July capital flows into the US early in the session, and then further weakened later in the session as investors made a last-ditch effort to move the market in otherwise sluggish trade, Forex dealers said.
Increased inflow of funds into the local stock market also boosted rupee sentiment. Foreign Institutional Investors (FIIs) have pumped in Rs 459 crore in the cash segment on September 15 and a total of Rs 2,448 crore during the current month.