The rupee rose by 5 paise to Rs 63.46 against the US dollar in early trade on Friday at the Interbank Foreign Exchange market on fresh selling of the dollar by exporters amid increased foreign capital inflows.
Forex dealers said a higher opening in the domestic equity market also supported the rupee. Dollar's gains against some currencies overseas, however, capped the rise.
The rupee had lost 10 paise against the dollar on Thursday on persistent demand for the American currency from banks and importers in line with higher greenback overseas.
The benchmark BSE Sensex climbed 130.20 points, or 0.45%, to 28,576.32 in early trade on Friday.