The rupee appreciated 11 paise to 74.71 against the US dollar in the opening trade on Wednesday, supported by positive domestic equities and weak American currency.
At the interbank foreign exchange, the rupee opened at 74.76 against the American dollar, then inched higher to quote 74.71, registering a rise of 11 paise from the last close.
On Tuesday, the domestic unit settled 17 paise lower at 74.82 against the US dollar as caution set in among forex market participants after the government in the budget revised fiscal deficit target upwards for FY22.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.13 per cent lower at 96.26.
According to provisional data of the commerce ministry, the country's exports rose by 23.69 per cent to USD 34.06 billion in January, on healthy performance by engineering, petroleum and gems and jewellery segments even as the trade deficit widened to USD 17.94 billion during the month.
The rupee surged this Wednesday as the weakness of the dollar could offset weak fiscal deficit projections from the government, Sriram Iyer, Senior Research Analyst at Reliance Securities said.
Most of the Asian peers have started weaker, while stronger crude oil prices will also weigh on sentiments this Wednesday, Iyer noted.
On the domestic equity market front, the 30-share Sensex was trading 550.53 points or 0.94 per cent higher at 59,413.10, while the broader NSE Nifty advanced 165.90 points or 0.94 per cent to 17,742.75.
Global oil benchmark Brent crude futures rose 0.34 per cent to USD 89.46 per barrel.
Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 21.79 crore, as per stock exchange data.