Indian rupee ended marginally higher at 74.66 per dollar, amid buying saw in the domestic equity market.
It opened higher by 5 paise at 74.67 per dollar against previous close of 74.72 and traded in the range of 74.51-74.73.
At close, the Sensex was up 557.63 points or 1.15% at 48,944.14, and the Nifty was up 168 points or 1.16% at 14653.
The USDINR pair is finding hurdles at higher levels due to continuous supply at 75.00-75.50. As the Dollar index is expected to bounce from support level of 90.5-91, we may see the rupee move towards 75.50 levels once again, said ICICI Direct.
The dollar-rupee April contract on the NSE was at Rs 74.79 in the last session. The open interest fell 5% for the April series, it added.
The dollar hovered near multi-week lows versus major peers on Tuesday, weighed by subdued Treasury yields, as investors consolidated positions ahead of the Federal Reserve's policy decision this week.
"Rupee traded strongly near 74.70 on back of lower dollar index moves, and good participation in the capital market seen on the first week of the day. With lock-down, some respite was seen in Covid-19 numbers especially in Mumbai. Helping new infection some control," said Jateen Trivedi, Senior Research Analyst at LKP Securities.
"Rupee can be seen in a range of 74.50-75.00 in coming sessions," he added.