Mumbai: Extending gains for the second straight day, the rupee rose by eight paise to close at 63.84 against the US dollar on persistent selling of the greenback by banks and exporters on hopes of foreign capital inflows amidst a strong capital market.
Weakness of the dollar in the overseas market also boosted the rupee value against the dollar, forex dealers said.
The rupee resumed lower at 64.03 against its last closing level of 63.92 at the Interbank Foreign Exchange and slid further to 64.05 on initial dollar demand from banks and importers amid foreign capital outflows.
However, it recovered immediately to 63.78 on selling of dollars by banks and exporters before concluding at 63.84 per dollar, showing a gain of 8 paise, or 0.13 per cent, from its last close.
The rupee gained 24 paise, or 0.37 per cent, in last two days.
It moved in a range of 63.78 and 64.05 during the day.
In the overseas market, the dollar weakened against major currencies on Tuesday, adding to losses from Monday's session, as uncertainty about a Fed rate hike lingered.
The dollar was sent sharply lower against the yen on Wednesday after comments from Bank of Japan Governor Haruhiko Kuroda, who suggested the Japanese currency won't fall further as the real effective exchange rate is already "very weak".
The dollar index was trading lower by 0.15 per cent against its major global rivals on Wednesday.
Meanwhile, the benchmark BSE Sensex ended higher by 359.25 points or 1.36 per cent.
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