The local unit also got a boost from higher domestic equity markets.
The dollar fell further against the yen to hit a 15-month low in Asian trade while the euro gained after firm German growth, which also supported the rupee's upmove.
Besides, inflation based on wholesale prices eased to a six-month low of 2.84 per cent in January on cheaper food articles even as vegetable prices continued to rule high.
The rupee gained 18 paise today to end at a two-week high of 63.91 against the dollar, a level last seen on January 31 when it had finished at 63.58.
Yesterday, the rupee had ended 23 paise higher at 64.09 against the dollar.
In other cross-currency trades, the rupee firmed up against the pound sterling to end at 89.79 from 88.76. It also strengthened against the euro to close at 79.73.
The local unit closed at 59.95 per 100 Japanese yens from 59.66 earlier.
Forward spot market rates for July month moved to 129-131 from 134-136 and for January month to 265-267 from previous mark of 270.50-272.50.
The 10-year government bond yield gained nearly seven basis points after surging US treasury yield worried traders that it will curb inflows into the Asian nations sovereign debt. Higher international crude oil prices also weighed on sentiment.
Indias 10-year bond yield ended at 7.57 per cent from Wednesdays close of 7.49 per cent. Bond yields and prices move in opposite directions.
Meanwhile, market benchmark Sensex rose by 141.52 points, or 0.41 per cent, to close at 34,297.47. The broader NSE Nifty gained 44.60- points, or 0.42 per cent, to end at 10,545.50 on easing inflation worries and positive global cues.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)