The Indian rupee strengthened against the U.S. currency on Wednesday, led by dollar inflows after the long weekend and an improvement in the overall risk sentiment.

The rupee was trading at 79.33 per U.S. dollar by 0551 GMT, against 79.6550 on Friday. India's forex and money markets were closed on Monday and Tuesday.

Dollar credits received by Indian exporters following the long weekend, the healthy risk mood and dip in oil prices "helped rupee make up for last week's underperformance," said a trader at a private sector bank. Last week, rupee was among the worst performing Asian currencies.

Rupee should "run into the familiar" resistance at 79.20 and is more likely to see 79.50 than 79, he added.

Indian equities rose on Wednesday on the back of a moderation in inflation rate and decline in oil prices. India's benchmark gauge, the BSE Sensex, climbed to its highest level since April. Foreign investors have bought more than $2.5 billion of Indian shares so far this month .

Other Asian equity indexes advanced, while U.S. futures were almost flat.

Oil prices slipped for the third straight day on Tuesday, pushing the Brent crude futures to their lowest level since February. Worries over an economic slowdown and the prospects of a U.S. Iran deal that could boost supplies are impacting demand for oil.

The dollar index inched lower just ahead of the release of minutes of the U.S. Federal Reserve's July meeting. Traders will parse the minutes for cues on the size of rate hike at the September meeting.