Here are 10 things to know about rupee's movement:
"The biggest factors for appreciation in rupee remain foreign fund inflows," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.
Foreign institutional investors (FIIs) remained net buyers of equities with a purchase of Rs 46.93 crore of shares on a net basis on Wednesday.
"For the current fiscal, RBI has purchased more than $36 billion, which helped rupee appreciation. FIIs bought shares of more than Rs 5,100 crore on a net basis in the past two sessions," Mr Sharma said.
This month, FIIs poured funds of $3.4 billion (around Rs 24,266 crore) in the equity segment till now compared to inflows of $1.7 billion (around Rs 12,130 crore) in the previous month.
According to Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee was also supported by gains in domestic stock markets.
Domestic stock markets rose to record levels on Wednesday. The Sensex ended 199.31 points (0.49 per cent) higher at 41,020.61 and Nifty settled with a gain of 63.00 points (0.52 per cent) at 12,100.70 - their highest closing levels ever.
"Going further, we need to see whether RBI continues to buy dollars or halts its purchases. If the pace of buying is reduced or halted and if the rupee breaks 71.40, we might see rupee retracing back near 70.70-71.00 area by the month of December," said Amit Pabari, Forex Advisors, CR Forex.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.06 per cent to 98.31 on Wednesday.
The 10-year government bond yield was at 6.47 per cent.
Brent crude, the global oil benchmark, rose 0.37 per cent to $64.51 per barrel in futures trade.