A higher opening in domestic equities and on US-China trade talk supported the domestic currency.
Mumbai: The rupee appreciated by 23 paise to 70.21 against the US dollar in opening trade on Wednesday, driven by easing crude prices, higher opening in domestic equities and on US-China trade talk hopes.
Forex dealers said, investors sentiments were buoyed after US President Donald Trump on Tuesday hoped that the world's top two economies would be able reach an agreement.
The rupee opened strong at 70.32 at the interbank forex market then gained further ground and touched 70.21 amid a positive opening in domestic equities, displaying gains of 23 paise over its last close.
The rupee on Tuesday recovered 7 paise to close at 70.44 to the US dollar.
"I think it's going to turn out extremely well, we're in a very strong position," Trump said.
The President also described his relationship with President Xi Jinping of China as "extraordinary". When asked about the talks with China having "collapsed".
He rejected that characterisation. "We have a very good dialogue... it'll always continue. We had a deal that was very close and then they broke it," he said.
Meanwhile, foreign fund outflows weighed on the domestic currency and restricted the upmove. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 2,011.85 crore on a net basis on Tuesday, provisional exchange data showed.
Brent crude futures, the global oil benchmark, eased 0.31 per cent to USD 71.02 per barrel.
Meanwhile, the benchmark BSE Sensex was trading higher by 87.83 points, or 0.24 per cent to quote at 37,410.15 while the NSE Nifty was trading at 11,245.00, down by 22.95 points, or 0.20 per cent.