The Indian rupee gained 6 paise to trade at 74.78 against the American dollar in early deals on Wednesday tracking weakness in the greenback.
At the interbank forex market, the rupee was trading in a narrow range.
It opened at 74.83 against the US dollar gained further ground and touched 74.78 against the US dollar, up 6 paise over its last close of 74.84.
"The rupee continues to remain in the 74.50-75.00 band. Nationalised banks continue to buy US dollars aggressively on dips. The dollar has been weakening against majors but the overall Asian and emerging market basket has not appreciated to the same extent against the USD," IFA Global Founder and CEO Abhishek Goenka said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.02 per cent to 93.68.
"Ahead of the US Federal Reserve's policy today, the central bank has extended its emergency lending programs by three months to the end of 2020. This further stoked USD weakness," Goenka said.
He added that "today is the exchange traded currency derivative expiry for July. We may see some selling on RBI fix on account of the same".
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 114.89 points lower at 38,378.06 and broader NSE Nifty fell 20.85 points to 11,279.70.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 245.95 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.14 per cent to USD 43.28 per barrel.