The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13% lower at 96.26.
The rupee rose 11 paise to 74.71 against the US dollar in early trade on February 2, supported by positive domestic equities and a weak US currency.
At the interbank foreign exchange, the rupee opened higher at 74.76 against the US dollar, then hit a high of 74.71, registering a rise of 11 paise from the previous close.
On Tuesday, the domestic unit closed 17 paise lower at 74.82 against the US dollar as caution among foreign exchange market participants after the government revised fiscal deficit target for FY12 in the Budget.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13% lower at 96.26.
The country’s exports rose 23.69% to $34.06 billion in January, according to provisional data from the commerce ministry, also on a healthy performance from engineering, petroleum and gems and jewelery segments, while the trade deficit widened to $17.94 billion during the month .
A weakness in the dollar could offset the government’s weak fiscal deficit estimates, said Sriram Iyer, senior research analyst at Reliance Securities, as the rupee rose on Wednesday.
Mr Iyer said most Asian peers have made a weak start, while strong crude oil prices will also affect sentiments this Wednesday.
On the domestic equity market front, the 30-share Sensex was trading 550.53 points or 0.94% higher at 59,413.10, while the broader NSE Nifty was up 165.90 points or 0.94% at 17,742.75.
Global oil benchmark Brent crude futures rose 0.34% to $89.46 per barrel.
Foreign institutional investors were net sellers in the capital markets on Tuesday as they sold shares worth Rs 21.79 crore, according to stock exchange data.
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