The rupee appreciated 14 paise to 75.28 against the US dollar in early trade on Wednesday tracking weakness in the greenback and gains in the domestic equity market.
Forex traders said, investor sentiment strengthened after the human clinical trials for COVID-19 vaccine were initiated in India.
The rupee opened at 75.35 against the US dollar, then gained further ground and touched 75.28 against the US dollar, up 14 paise over its previous close.
It had settled at 75.42 against the greenback on Tuesday.
The Indian Council of Medical Research (ICMR) on Tuesday said human clinical trials for a potential vaccine for COVID-19 had been initiated in the country with approximately 1,000 volunteers participating in the exercise for each of the two indigenously developed vaccine candidates.
The Drugs Controller General of India (DCGI) has permitted two vaccines — one developed by Bharat Biotech International Limited in collaboration with ICMR and another one by Zydus Cadila Healthcare Ltd — to go in for the first and second phase of human clinical trials.
The number of cases around the world linked to the disease has crossed 1.32 crore and the death toll has topped 5.77 lakh.
In India, the death toll due to COVID-19 rose to 24,309 and the number of infections spiked to 9,36,181, according to the health ministry.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05 per cent to 96.21.
The 30-share BSE benchmark Sensex was trading 516.58 points higher at 36,549.64 and broader NSE Nifty rose 148.65 points to 10,756.00.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 1,565.62 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.44 per cent to USD 43.09 per barrel.