The rupee on Thursday gained 15 paise to 54.60 against the US dollar in early trade at the Interbank Foreign Exchange market on the back of increased capital inflows.
Forex dealers said sustained dollar selling by exporters and banks and a higher opening in the equity market also boosted
the rupee sentiment.
However, dollar's gains against the euro and yen overseas, capped the gains to some extent, they added.
The local currency had ended 23 paise higher at 54.75 against the dollar on Wednesday.
Meanwhile, the BSE benchmark index Sensex rose by 102.53 points, or 0.52%, to 19,769.12 in early trade on Thursday.