The rupee appreciated 8 paise to 82.73 against the US dollar in early trade on Tuesday on easing crude oil prices and a positive trend in domestic equities.
At the interbank foreign exchange, the domestic unit opened at 82.74 against the dollar, then gained ground to touch 82.73, registering a rise of 7 paise over its previous close.
On Monday, the rupee settled 34 paise lower at 82.81 against the US dollar.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, Asian and emerging market peers started mixed on Tuesday as a cautious tone has set in among global investors ahead of the Fed meeting.
Any sharp depreciation in the rupee could see the Reserve Bank of India (RBI) step in, Iyer noted.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.19 per cent to 111.31.
Brent crude futures, the global oil benchmark, declined 0.98 per cent to USD 94.83 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 309.52 points or 0.51 per cent higher at 61,056.11. Similarly, the broader NSE Nifty rose 102.40 points or 0.57 per cent to 18,114.60.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth Rs 4,178.61 crore, according to exchange data.