Indian rupee erased the intraday losses and trading higher at 72.96 per dollar, amid buying seen in the domestic equity market.
It opened 8 paise lower at 73.16 per dollar against previous close of 73.08.
The Sensex was up 312.97 points or 0.60% at 52162.45, and the Nifty was up 93.20 points or 0.60% at 15669.40.
"Rupee traded weak towards 73.20 from 72.85, in the first half of day, the manufacturing index in the US provided crude positive trend which kept rupee on a weak note. Going ahead the rupee can be in range of 72.75-73.25," said Jateen Trivedi, Senior Research Analyst at LKP Securities.
The US dollar was wavering above major support levels on Thursday, as traders awaited a batch of US economic data that could set the tone at central bank meetings later this month.