The rupee had settled at 71.43 against the US currency on Wednesday.
The rupee gained by 27 paise to end at 71.16 against the dollar on Thursday.
The currency opened at 71.38 and moved in a range of 71.14-71.47 during the session before paring some of the gains by the end of the session.
According to analysts, optimism over the Brexit deal amid falling crude oil prices along with persistent foreign fund inflows and strength in the domestic equity markets supported the rupee, according to analysts.
The rupee had settled at 71.43 against the US currency on Wednesday.
Here are 10 things to know about rupee:"Rupee has appreciated nearly 1 per cent in two days.
The hopes of US-China closing the phase-one trade deal along with the announcement Brexit deal, has kept all emerging market currencies including rupee, afloat," said Rahul Gupta, Head of Currency, Emkay Global Financial Services.
Global markets rallied after Britain and the European Union said they have struck an outline Brexit deal following prolonged negotiations.The deal, however, must still be formally approved by the bloc and ratified by the European and UK parliaments.
Weak US economic data, a fall in dollar overseas and speculation over a rate cut by the US central bank also supported therupee, Mr Gupta said.
The rupee can appreciate further if the Brexit deal gets parliamentary approval, he added.Foreign institutional investors (FIIs) remained net buyers in the capital markets, infusing Rs 1,158.63 crore on Thursday, exchange data showed.The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.31 per cent to 97.69.Domestic stock markets registered sharp gains on Thursday backed by strength in the banking sector.
Benchmark indices S-P BSE Sensex and NSE Nifty gained over 1 per cent to close at their highest levels recorded in three weeks.Crude oil prices fell in anticipation of higher supply going forward.
Brent futures - the global benchmark for crude oil -was last seen trading 0.50 per cent lower at $59.12 per barrel.
The rupee is expected to move in a range of 70.80-71.80 over the next few sessions and global cues will be monitored closely for cues going forward, said Amit Pabari, Managing Director, CR Forex Advisors.At Thursday's close, the rupee has declined by 139 paise- or 1.99per cent so far this year.Follow TheIndianSubcontinent for latest election news and live coverage of assembly elections 2019 in Maharashtra and Haryana.Subscribe to our YouTubechannel, like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.