The rupee closed at 60.14/15 per dollar compared with 60.11/12 on Monday. Foreign investors have been active buyers of debt and equities since March, and net purchases in April alone have already totalled $933.67 million, according to the market regulator's data.
The rupee had touched an eight-month high of 59.5950 on April 2, before giving up some gains, with the Reserve Bank of India also suspected of having bought dollars to replenish its foreign exchange reserves.
The market expectation broadly is that the FOMC minutes will be less hawkish than the press conference in March.The rupee rose to the session high of 59.80 as the BSE Sensex rose as much as 1.77 percent to an all-time high of 22,740.04, while the Nifty rose as much as 1.7 percent to a record high of 6,808.70.
However, gains were capped ahead of the Fed's minutes given continued concerns about when the central bank will start to raise interest rates as it unwinds its asset-purchase programme.Some dealers also cited dollar buying by state banks for defence purposes.
In the offshore non-deliverable forwards, the one-month contract was at 60.62, while the three-month was at 61.37.