The rupee was trading strong at 68.07 due to heavy capital inflows into the domestic equity market and as the dollar remained weak against other currencies overseas.
But month-end demand for the American currency from importers and banks kept the rupee under pressure.
The domestic unit opened a tad weak at 68.17 against the previous close of 68.15 at the Interbank Foreign Exchange market today.
It hovered in a range of 68.19 and 68.07 before quoting at 68.07, up 8 paise at 4.35 pm local time.
Meanwhile, the Sensex and Nifty closed at their highest in nearly three months on Wednesday, as financial stocks continued to rally on the back of quarterly results, while the sentiment was aided by optimism ahead of the federal budget.
The broader NSE index closed up 126.95 points or 1.5 per cent at 8,602.75, while the benchmark BSE index ended 332.56 points or 1.21 per cent higher at 27,708.14.
Moves by Donald Trump on oil pipeline projects on Tuesday boosted US equity markets and pulled the greenback back after the first fall in the index that measures its broader strength below 100 since early December.
But any faith in the new president's growth agenda has been countered by hints of concern from the new administration over the strength of the dollar and market worries about Trumps protectionist leanings.
The US dollar was just under 0.2 per cent lower against the yen on the day and 0.1 per cent weaker against the basket in early European deals.