Rupee strengthened 17 paise to 95.56 against the US dollar in early trade, supported by weakness in the greenback after the US Treasury announced a higher buyback of longer-dated government bonds.The US Treasury said it would at least double the amount of longer-term government bonds it buys back in each operation, from $2 billion to $4 billion, beginning September 9. The announcement pushed US long-term yields lower and narrowed the dollar’s yield advantage, weighing on the greenback.Forex traders said the dollar index dropped to its lowest level since late May following the Treasury announcement. The dollar was also facing pressure from reduced expectations of further Federal Reserve tightening, even as Fed policymakers raised their concerns over inflation at the July meeting, according to the Fed minutes.The domestic currency opened at 95.57 at the interbank foreign exchange and moved up to 95.56, compared with its previous close of 95.73. The rupee had ended Wednesday just 1 paisa higher against the US currency.The dollar index, which tracks the US currency against a basket of six currencies, was at 98.82, down 0.01 per cent."Lower long-term yields and concerns around fiscal support can reduce the appeal of dollar assets," CR Forex Advisors MD - Amit Pabari said.However, firm crude prices continued to weigh on the rupee. Brent crude, the global oil benchmark, was up 0.32 per cent at $91.91 a barrel in futures trade."Oil continues to trade above $90 with a nervous edge, keeping pressure on India's import bill. So while a weaker dollar offers some relief to the rupee, elevated oil prices remain a major counterweight," Pabari said.Pabari said the rupee had immediate support near 95.30–95.50 and could gradually move towards 96.20–96.50 as long as that level holds."The weaker dollar may create short-term pauses, but oil and sentiment remain fragile. Dips are therefore likely to be shallow and short-lived rather than a genuine trend reversal," he said.Equities opened higher on the domestic market, with the Sensex rising 504.32 points to 77,416.16 and the Nifty gaining 118.85 points to 24,198.55.Foreign institutional investors were net buyers of Indian equities worth Rs 407.99 crore on Wednesday, exchange data showed.