In early trade on Wednesday, the rupee rose 17 paise to 77.17 against the US dollar, as the American currency fell from its recent highs.
The rupee began at 77.24 versus the dollar on the interbank foreign exchange, then gained further ground to quote at 77.17, up 17 paise from the previous close. The rupee also hit a low of 77.31 against the dollar in early trade.
The rupee was trading at 77.34 against the US dollar on Tuesday.
The dollar index, which measures the strength of the greenback against a basket of six currencies, was down 0.06 percent at 103.85.
Domestic equities, firm crude oil prices, and ongoing foreign fund outflows, according to forex traders, could weigh on the currency and limit its gains.
The 30-share Sensex was up 27.61 points, or 0.05 percent, at 54,392.46, while the wider NSE Nifty was up 8.30 points, or 0.05 percent, at 16,248.35 on the domestic equity market.
Brent crude futures increased 1.83 percent to USD 104.34 per barrel, the global benchmark.
According to stock exchange data, foreign institutional investors were net sellers in the capital market on Tuesday, offloading shares worth Rs 3,960.59 crore.