The rupee strengthened further by 6 paise to close at 65.20 against the US dollar on the back of positive macroeconomic data and upbeat local equities.
Easing global trade war fears after US President Donald Trump hinted that military action in Syria might not be imminent along with some consolidation in global crude prices kept forex market sentiment buoyant.
A number of favourable factors, including encouraging growth-inflation dynamics driven by high industrial growth and lower inflation further aided overall trading mood.
"Economic data and continued inflows from foreign investors supported the domestic currency," Anand James Chief Market Strategist at Geojit Financial Services said.
Foreign investors had infused around $100 million in capital markets on Thursday.
Reflecting improvement in the economic situation, industrial production grew by a healthy 7.1% in February while the key retail inflation slipped to a five-month low of 4.28% in March, official data showed on Thursday.
First Published: IST