The rupee on Tuesday gained 33 paise to close at 49.46/47 against the US currency in line with sharp rebound in local equities amid fresh dollar selling by exporters and some banks.
The domestic currency moved between 49.32 and 49.75 at the Interbank Foreign Exchange (Forex) market before settling up by 33 paise, or 0.66 per cent, at 49.46/47.
Fresh dollar selling by exporters and some banks in anticipation of dollar falling overseas aided the rupee.
Investors expect the dollar to fall after European leaders late yesterday signed a fiscal pact aimed at ending huge deficits in the region.
Meanwhile, the BSE benchmark index Sensex today bounced back by over 330 points, or 1.96 per cent, to close the day at 17,193.55, after an overnight steep fall of 370.68 points.
The dollar index, a gauge of six major currencies, was down by nearly 0.4 per cent, while New York global crude oil was trading above $100 a barrel in European market today.
The rupee premium for the forward dollar moved down further on sustained receivings by exporters.
The benchmark six-month forward dollar premium payable in July softened to 177-179 paise from 179-181 paise on Monday and far-forward contracts maturing in January also eased to 288-290 paise from 290-292 paise. The RBI has fixed the reference rate for the dollar at 49.6825 and for euro at 65.5157.
The rupee recovered slightly against the pound sterling to settle at 78.07/09 from Monday’s close of 78.10/12 and also recouped against the euro to 65.28/30 from 65.35/37. It also rebounded against the Japanese yen to 64.76/78 per 100 yen from last close of 65.00/02.