It moved in a range of 54.98 and 55.08 per dollar during the morning deals.
Sustained foreign capital inflows into the equity market mainly boosted rupee value against the dollar, a forex dealer said.
In New York, nervousness over the so-called fiscal cliff inspired haven-related flows that boosted the US dollar on last Friday as investors continued to unload global equities.
The yen, meanwhile, continued to draw more attention than usual after Japan's lower house of Parliament was dissolved.
Meanwhile, the Indian benchmark 30-share index, Sensex, moved up by 10 points or 0.06 per cent to 18,319.69 at 1050 hrs.