The rupee erased some gains made this morning although it was still trading 39 paise stronger against the dollar on fresh selling of the American currency by banks and exporters.
The dollar has also eased in the overseas currency markets.
The rupee resumed higher at 55.35 per dollar as against the last weekend's level of 55.75 at the Interbank Foreign Exchange (Forex) Market and moved up further to 55.24.
However, it failed to maintain the early gains on mild dollar. It was quoting at 55.36 per dollar at 1040hrs.
In New York, the dollar declined last Friday against major global currencies following stronger-than expected US employment report.
Strong equities market in India also helped the rupee gain on the back of FII inflows, traders said. The BSE 30-stock index, Sensex, was trading up by 228 points or 1.33%.