The rupee appreciated 32 paise to 83.01 against the US dollar in morning trade on Wednesday as the American currency retreated from its elevated levels after US inflation came lower than expected.
Forex traders said the rupee opened on a bullish note as the American currency weakened after US Inflation eased to its lowest level since September 2021.
Moreover, a positive trend in domestic equities boosted investor sentiments.
At the interbank foreign exchange, the rupee opened at 83.03, then touched 83.01 against the American currency, higher by 32 paise over its previous close.
On Monday, the rupee declined by 5 paise to settle at its all-time low of 83.33 against the American currency.
The forex and equity markets were closed on Tuesday on account of Diwali-Balipratipada.
From an all-time low it marked last week, the rupee is trading at nearly a two-month high around 83.00 levels, CR Forex Advisors MD Amit Pabari said.
A breakdown below 82.95 will push the pair towards 82.80 and 82.50 levels in the sessions to come, Pabari added.
Meanwhile, the dollar index was trading marginally up by 0.02 per cent at 104.07. On Monday, the dollar index was at 105.77.
Brent crude futures, the global oil benchmark, was trading 0.35 per cent higher at $82.76 per barrel.
In the domestic equity market, the BSE Sensex advanced 598.53 points or 0.92 per cent to 65,532.40 points. The NSE Nifty was up 184.85 points or 0.95 per cent to 19,628.40 points.
According to exchange data, Foreign Institutional Investors (FIIs) were net sellers in the capital market on Monday as they offloaded shares worth Rs 1,244.44 crore.