The rupee extended its gains against the American currency for the second straight day, firming up by another 8 paise to close at 68.07 on selling of dollars by banks and exporters amid lower greenback overseas.
Expectations of good foreign capital inflows into equity market in view of firm trend in the stock market also boosted the rupee value against the dollar, a forex dealer said.
The rupee resumed lower at 68.18 per dollar as against the yesterday's closing level of 68.15 at the Interbank Foreign Exchange (Forex) market and dropped further to 68.19 per dollar on initial dollar demand from importers.
However, it firmed up afterwards to 68.0575 before ending at 68.07 per dollar, showing a gain of 8 paise or 0.12 percent.
It has gained by 13 paise or 0.19 percent in two days.
The dollar index fell by 0.26 percent in the late afternoon trade against a basket of six currencies.
Overseas, the dollar was moderately lower against the yen today, with investors reluctant to drive it higher amid caution about potential jawboning to stem a stronger dollar from Donald Trump and his administration.
Many worry that US President Donald Trump's protectionist approach on trade could hurt economic growth, as he kicked off his presidency this week by signing an executive order pulling the US from the Trans-Pacific Partnership.
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