The rupee appreciated 18 paise to 75.14 against the U.S. dollar in the opening trade on Wednesday amid signs of de-escalation in the conflict between Russia and Ukraine.
At the interbank foreign exchange, the rupee opened at 75.24 against the American dollar and then inched higher to quote 75.14, registering a rise of 18 paise from the last close.
On Tuesday, the rupee snapped its five-session losing streak and surged 28 paise to close at 75.32 against the U.S. dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06% higher at 96.04.
"The Indian Rupee opened stronger against the U.S. Dollar on Wednesday as tension de-escalate in Eastern Europe," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Crude and the dollar were subdued this Wednesday morning and lent support, Mr. Iyer said, adding that investors will look to retail sales data and Fed minutes for further cues.
U.S. President Joe Biden has said that an invasion of Ukraine remains a distinct possibility. Mr. Biden said the U.S. is still open for diplomacy to resolve the issue while stressing that more than 150,000 Russian troops remain on the Ukrainian border.
On the domestic equity market front, the 30-share Sensex was trading 85.87 points or 0.15% lower at 58,056.18, while the broader NSE Nifty declined 14.10 points or 0.08% to 17,338.35.
Global oil benchmark Brent crude futures fell 0.26% to $93.04 per barrel.
Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth ₹2,298.76 crore, as per stock exchange data.
