The rupee appreciated by 9 paise to 46.15 a dollar in early trade today supported by fresh capital inflows by foreign funds.
The rupee had ended 16 paise higher at 46.24/25 against the dollar yesterday.
Dealers said increased capital inflows into equities by foreign funds provided support to the rupee.
Asian currencies strengthened against the US currency which also boosted rupee sentiment, they added.
Meanwhile, the Bombay Stock Exchange index Sensex rose by 86.24 points, or 0.47 per cent, to 18,167.45 points in the opening trade.