The rupee on Wednesday appreciated by eight paise to 54.10 against the US dollar on the Interbank Foreign Exchange (Forex) market in early trade on increased foreign fund flows amid firm local equities.
Forex dealers said euro's gains against the American currency in the overseas market also supported the rupee.
The local unit had closed higher at 54.18 against the dollar on Monday.
Forex market was closed on Tuesday for Shivaji Jayanti.
Meanwhile, the 30-share BSE Sensex rose by 106.70 points, or 0.54%, to 19,742.42 in early trade oN Wednesday.