The Indian rupee on Tuesday was raised by 8 paise to 71.58 against the US dollar, as investors were hopeful that the Reserve Bank will go for another rate cut to boost economic growth.
Forex traders said, the domestic unit is trading in a narrow range ahead of the RBI monetary policy decision on Thursday.
At the interbank foreign exchange, the rupee opened at 71.66, then gained and touched a high of 71.58 against the dollar, showing a rise of 8 paise over its last close.
The Indian rupee on Monday had closed at 71.66 against the US dollar.
Bankers and experts believe the Reserve Bank may cut interest rates for the sixth straight time on December 5 to support growth that has continued to slip.
Traders said rupee is trading in a narrow range as market is awaiting fresh indication on the potential US-China trade deal.
The 10-year government bond yield was at 6.48% in morning trade.