Also, sustained selling of the American currency by exporters and banks propped up the rupee after two successive sessions of fall, traders said.
Higher crude prices and sustained foreign fund outflows, however, capped the rupee gains to some extent, they said.
Brent crude, the global benchmark, was trading at USD 57.15 per barrel, higher by 2.14 per cent.
Foreign funds pulled out Rs 157.72 crore from the capital markets on a net basis Friday, while domestic institutional investors bought equities to the tune of Rs 240.60 crore, provisional data showed.
At the Interbank Foreign Exchange (forex), the rupee opened on a firm note at 69.95. It gained further to hit a high of 69.66 following dollar selling by exporters, before finally closing at 69.72, up 48 paise.
On Thursday, the rupee had weakened for the second straight session and slipped by 2 paise to 70.20 against the US dollar.
"The Indian rupee appreciated around 0.5 per cent to trade below 70 per US dollar. The appreciation is in line with most of the other emerging market currencies, reflecting opinions that Fed rate hikes may be nearing an end, and also the decelerating growth prospects of the US," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.8653 and for rupee/euro at 79.5659. The reference rate for rupee/British pound was fixed at 88.2599 and for rupee/100 Japanese yen at 64.60.
The BSE benchmark Sensex jumped 181 points Friday while the NSE Nifty reclaimed the 10,700-mark, driven by robust buying in banking, metal and pharma stocks amid positive global cues and a strengthening rupee.