The rupee appreciated by 4 paise to 69.36 against the US dollar in opening trade Tuesday, driven by weakening of the greenback and positive opening in domestic equities.
At the interbank foreign exchange market, the domestic unit opened at 69.40 against the dollar, then gained momentum and touched 69.36, up 4 paise over its previous close.
The rupee had settled at 69.40 against the US dollar Monday.
The local unit, however, pared some gains and was quoted at 69.38 against the American currency at 0933 hrs.
Forex dealers said, selling of the American currency by exporters, easing crude prices and positive opening in domestic equities supported the rupee.
On the other hand, foreign fund outflows restricted the rupee upmove.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 948.98 crore Monday, as per the provisional data.
Brent crude futures, the global oil benchmark, fell 0.20 per cent to USD 71.10 per barrel.
Meanwhile, domestic bourses opened on a bullish note Tuesday with benchmark indices Sensex trading 159.39 points up at 38,759.73 and Nifty up 40.60 points at 11,638.85.