The rupee appreciated 25 paise to 73.80 against the US dollar in the opening session on Tuesday, tracking strong domestic equities and sustained foreign fund inflows. Traders said investor risk sentiment improved on positive macro-economic data on the domestic front, while weakness of the American currency in the overseas market also supported the rupee.
At the interbank forex market, the domestic unit opened at 73.93 against the US dollar and gained further ground to touch 73.80, registering a rise of 25 paise over its previous close. On Friday, the rupee had settled 17 paise lower at 74.05 against the US dollar.
Forex market was closed on Monday on account of Guru Nanak Jayanti. Meanwhile, India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on consumer demand bouncing back.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.05 per cent to 91.82. Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 7,712.98 crore on a net basis on Friday, according to exchange data.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 258.59 points higher at 44,408.31, and the broader NSE Nifty rose 71.50 points to 13,040.45. Brent crude futures, the global oil benchmark, fell 1.22 per cent to USD 47.59 per barrel.