The rupee ended higher by 9 paise at 63.85 against the American currency on persistent selling of dollars by banks and exporters on hopes of resumption in foreign fund inflows amid rise in equity market.
However, higher dollar in the global market after strong US jobs data announced last weekend and continued capital outflows, restricted the gains, analysts said.
The euro fell against the dollar and yen in Asia on Monday as jittery investors await the outcome of the Eurogroup finance ministers meeting on Greece in Brussels later on Monday.
Rising for the second straight day, the domestic currency at the Interbank Foreign Exchange (Forex) market, resumed better at 63.85 a dollar and ended at the same level after moving in a range of 63.77 and 64.01, registering a gain of 9 paise or 0.14%.
It has gained 38 paise or 0.59% in the last two days.
Meanwhile, the benchmark BSE Sensex on Monday ended with a gain of 401.91 points or 1.48%.
The foreign portfolio investors (FPIs) sold shares worth Rs 437.56 crore last weekend, according to a provisional data. The dollar index, a gauge of six other major global rivals, was trading higher by 0.25%.