Rupee firmed up against the US dollar during morning trade on Thursday on a strong surge in equity markets.
In active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency resumed higher at 40.80/82 per dollar from Wednesday's close of 40.89/90 a dollar and later hit a high of 40.77 a dollar.
Rupee later was quoted at 40.82/83 per dollar in late morning deals.
The Indian unit has bounced by more than 2 per cent in four sessions after touching four-month low of 41.71 during last week.
The benchmark Sensex surged by over 306.27 points this morning to touch 14,554.93 on the back of sharp rally in world markets.
Rupee rally was also attributed to expectations of a fresh capital inflows after indications that the US Federal Reserve may slash interest rates to pacify global markets which recently were rocked by credit worries, forex dealers said.