USD/INR closed at 71.9850 against its open at 71.62. Dollar rebounded after closing down Thursday on buying by oil importers and buying by foreign banks amid overseas funds outflows from local debt.
Crude oil prices dropped as tropical storm Gordon's path through the Gulf of Mexico turned out to be less problematic for the US oil and refining industry than many investors had feared.
Brent traded flat at $77.27/barrel while WTI fell 0.12% to $68.64/barrel.
Dollar index, which weighs greenback against a basket of six major currencies, traded at 94.99 Thursday compared to 95.55 at close of Indian Market Thursday.
The greenback plummeted against its major peers after a media report said Germany and the UK had made progress in Brexit talks amid concerns about international trade conflicts and rising inflation in emerging markets.
On Wednesday, Bloomberg reported that the UK and Germany have made progress on a Brexit deal. The decision of these governments is expected to result in a Brexit deal.
Local stocks opened higher Thursday on local fund buying and slide in crude oil prices helped boost investor risk appetite.
Sensex provisionally ends 175 points higher with 21 components in the green.