The rose by 20 paise to trade at 54.79 against the US currency in early trade on Tuesday on dollar selling by exporters and some banks.
Dealers said a higher opening in the equity market and strengthening of euro against the dollar supported the rupee.
The rupee had
lost 22 paise to close at one-week low of 54.99 against the dollar in Monday's trade due to month-end demand for the American currency.
Meanwhile, the BSE benchmark index Sensex rose by 132.22 points, or 0.68%, to 19,558.93 in early trade on Tuesday.