The rupee opened strong at 71.17 and further gained slightly to hit a high of 71.16 against the greenback.
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The rupee appreciated by 3 paise to 71.18 against the US dollar in early trade on Wednesday as easing crude oil prices and gains in domestic equity market lift investor sentiments.
However, a strong US dollar against major global currencies capped gains of the domestic unit, dealers said.
At the interbank foreign exchange market, the rupee opened strong at 71.17 and further gained slightly to hit a high of 71.16 against the greenback.
The domestic unit had settled at 71.21 against the American currency on Tuesday.
Brent crude futures, the global oil benchmark, declined 0.37 per cent to USD 64.35 per barrel.
Market benchmark Sensex jumped over 200 points on Wednesday tracking gains in index heavyweights HDFC twins, Infosys and Reliance Industries.
The 30-share BSE index was trading 204.30 points or 0.49 per cent higher at 41,528.11. The broader NSE was trading 46.70 points, or 0.38 per cent, up at 12,216.55.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.13 per cent to 97.65.
Foreign institutional investors sold equities worth Rs 50.08 crore on a net basis on Tuesday, provisional exchange data showed.
The 10-year Indian government bond yield was at 6.64 per cent.