At Interbank Foreign Exchange, rupee opened at 69.73 against US dollar and advanced to 69.64.
Mumbai: The rupee strengthened its gains by 25 paise to 69.64 against the US dollar in early trade on Tuesday, driven by sustained foreign fund inflows and weaker greenback against key rival currencies overseas.
Besides, selling of US dollar by exporters and banks also propelled rupee higher.
The US dollar index -- a measure of the value of the American currency relative to a basket of key foreign currencies -- was lower by 0.17 per cent at 97.012.
At the Interbank Foreign Exchange, the rupee opened at 69.73 against the US dollar and advanced to 69.64, showing a rise of 25 paise over the previous close.
In line with equities, the forex market sentiment has also been boosted by sustained fund inflows by foreign institutional investors (FIIs) in the last few sessions.
FIIs bought equities worth a net Rs 3,810.60 crore on Monday, while domestic institutional investors sold shares to the tune of Rs 1,955.55 crore, provisional data showed.
Analysts said that foreign funds poured money in domestic equity market by pricing in second term for the incumbent NDA government.
Lok Sabha polls will be held over seven phases, beginning April 11, followed by counting of votes on May 23.
On Monday, the Indian currency advanced by 25 paise to close at 69.89 against the US dollar.
Meanwhile, Brent crude futures, the global oil benchmark, rose 0.39 per cent to quote at USD 66.84 per barrel. Oil prices rose on account of healthy demand and output cuts led by producer group OPEC.
The BSE benchmark Sensex surged 303.92 points to 37,358.02 in opening trade on Tuesday, while the broader NSE Nifty was 91.35 points higher at 11,259.40.