The rupee firmed up by 12 paise to 68.33 against the US dollar on increased selling of the American currency by exporters and banks.
Forex dealers said besides sustained selling of the greenback, a higher opening of the domestic equity markets boosted the rupee at the interbank forex market.
However, the dollar's strength against some currencies overseas capped the gains of the domestic unit.
The dollar firmed after Federal Reserve Chairman Jerome Powell's US economic outlook reinforced views that the central bank is on track to hike interest rates gradually.
On Tuesday, the local currency bounced back to settle at a fresh two-week high of 68.45 against the US currency, gaining 12 paise as crude oil prices beat a hasty retreat, easing inflation and trade deficit worries.