The rupee today rose by 20 paise to 54.48 against the dollar in early trade at the Interbank Foreign Exchange market on continued selling of the US currency by exporters and banks.
Besides, a higher opening in the domestic equity market and strengthening of euro, which hovered at seven-week high against the American currency overseas, supported the rupee, forex dealers said.
Meanwhile, the BSE benchmark index Sensex extended yesterday's gains by rising 102.67 points, or 0.53 per cent, to 19,450.79 in early trade today.
The rupee had gained nine paise to close at 54.68 against the dollar yesterday on investor hopes of Parliament giving approval to FDI in multi-brand retail amid sustained selling of the US currency.