A weak dollar in overseas markets largely supported the upmove despite a sell-off in local stocks.
Strong capital inflows to equity and debt markets also provided support, forex traders said.
The greenback was broadly lower through the Asian session spooked by overnight comments from the Chicago Federal Reserve President Charles Evans that the Fed was in no rush to raise interest rates again and may wait until at least June before deciding on another hike.
The home currency opened modestly lower at 65.40 from Monday’s closing of 65.36 at the Interbank Foreign Exchange (forex) market and weakened further to 65.4450 due to fresh dollar purchases by importers.
However, selling of dollars by banks and some exporters helped the local unit to clock a smart recovery in late afternoon deals to hit a fresh intra-day high of 65.21 before ending at 65.30, revealing a rise of 6 paise, or 0.09 per cent. Today’s closing is nearly 17-month high for the domestic currency, which had ended at 65.27 on October 30, 2015.
Yesterday, the rupee had closed 10 paise higher against the greenback.
The RBI, meanwhile fixed the reference rate for the dollar at 65.3117 and for the euro at 70.2950.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped below the 100 mark for the first time since early February to trade sharply lower at 99.70.
In cross-currency trade, the rupee continued to drift against the British pound to end at 81.37 from 81.12 and remained subdued against the Japanese Yen and ended lower at 58.03 per 100 yens as compared to 57.91 yesterday.
It also fell back against the euro to finish at 70.58 from 70.29 earlier. .
PTI