The Indian rupee gained 18 paise and touched 74.10 against the US dollar in early trade on Wednesday, supported by a firm trend in domestic equities and weak American currency.
At the interbank foreign exchange, the domestic unit opened at 74.16 against the dollar, then inched higher to 74.10, registering a gain of 18 paise over its previous close.
On Tuesday, the rupee had settled at 74.28 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent down at 92.02.
Regional currencies have started marginally mixed against the dollar early Wednesday morning, Reliance Securities said in a research note.
The local unit could be supported by to the FPI inflows into the equity markets, easing crude oil prices, the note added.
Investors will also look to cues from the Reserve Bank of India's monetary policy meeting this week.
On the domestic equity market front, BSE Sensex was trading 483.15 points or 0.90 per cent higher at 54,306.51, while the broader NSE Nifty advanced 127.05 points or 0.79 per cent to 16,257.80.
Meanwhile, foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 2,116.60 crore, as per exchange data.
Global oil benchmark Brent crude futures advanced 0.11 per cent to $72.49 per barrel.
