The rupee rose by 7 paise to Rs 55.68 against the dollar in early trade today on the Interbank Foreign Exchange as the American currency weakened against euro overseas.
Besides, dollar selling by exporters and banks and a higher opening in the domestic equity market also supported the rupee, forex dealers said.
They added euro's gained against the dollar overseas after comments from German Chancellor Angela Merkel reaserting her desire to save the euro zone.
The rupee had lost 10 paise to close at a two-week low of 55.75 against the Greenback yesterday due to weakness in local shares and sustained demand of the dollar from importers.
Meanwhile, the BSE benchmark Sensex recovered by 88.47 points, or 0.50%, to 17,745.68.