The rupee today gained 7 paise to 54.87 against the dollar in early trade at the Interbank Foreign Exchange (Forex) market on selling of the US currency by exporters.
Besides, a higher opening in the domestic equity market and strengthening of the euro against the American currency overseas supported the rupee, forex dealers said.
Meanwhile, the BSE benchmark index Sensex recovered by 96.72 points, or 0.50%, to 19,420.52.
The rupee had lost 10 paise to close at 54.94 against the dollar yesterday due to month-end demand for the American currency from oil importers and capital outflows.