In early trade on Wednesday rupee rose by 11 paise at 82.01 against the US dollar tracking a positive trend in domestic equities and foreign fund inflows.
At the interbank foreign exchange, the domestic unit opened at 82.08 against the dollar, then climbed to 82.01, registering a rise of 11 paise over its previous close.
On Tuesday, the rupee closed at 82.12 against the US currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.11 per cent to 102.08.
Oil prices on Wednesday were stable after industry data revealed unexpected build in US crude and gasoline inventories helping calm the increasing concerns regarding the tightening supply ahead of cuts by OPEC producers. Brent crude was down by 5 cents at $85.57 per barrel and US West Texas Intermediate went down by 6 cents to $81.48 per barrel.
Forex traders said investors are focusing on India's CPI data scheduled to be released later in the day.
"The market will be focusing on India's CPI data, which is expected to come at 5.80 per cent vs the previous 6.44 per cent," CR Forex Advisors MD-Amit Pabari said.
However, falling inflation will push the RBI to pivot on the interest rate hike cycle, which could hurt the rupee going forward due to the narrowing interest rate differential between the US and India, Pabari added.
The markets on Wednesday opened flat with Sensex at 60,155.71, down by 2.01 points and Nifty rose by 22.15 points at 17,744.45. Tata Steel, Sun Pharma, HDFC Bank and ICICI Bank were the top gainers whereas TCS, Maruti, ITC, Infosys and HCL Tech were the top losers.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Tuesday as they purchased shares worth Rs 342.84 crore, according to exchange data.
With inputs from PTI