The rupee rose 11 paise to Rs. 55.01 against the dollar in early trade on Thursday at the Interbank Foreign Exchange on selling of the US currency by exporters and banks.
Besides, a higher opening in the domestic equity market and strengthening of euro and yen against the American currency overseas supported the rupee, forex dealers said.
Meanwhile, the BSE benchmark index Sensex extended Wednesday's gains by rising 63.83 points, or 0.35%, to 18,524.21.
The rupee had lost 2 paise to close at two-and-a-half month low of 55.12 against the dollar on Wednesday on heavy demand for the American currency.