The rupee strengthened by 14 paise to 73.15 against the US dollar in opening trade on Tuesday, helped by positive domestic equities and weak American currency.
At the interbank forex market, the domestic unit opened at 73.17 and gained further ground to touch 73.15, registering a rise of 14 paise over its previous close.
On Monday, the rupee had depreciated by 16 paise to close at 73.29 against the US dollar.
"Anticipation of US President Trump recovering from COVID and of Democrats and Republicans reaching a consensus on a fiscal stimulus package seems to be buoying risk sentiment," said Abhishek Goenka, Founder and CEO, IFA Global.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.13 per cent down at 93.39.
On the domestic equity market front, the BSE benchmark Sensex was trading 358.66 points higher at 39,332.36, and the broader NSE Nifty rose 97.30 points to 11,600.65.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 236.71 crore on Monday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.65 per cent to USD 41.56 per barrel.