The Indian rupee was up by 13 paise at 44.95 against the US dollar in early trade today on selling of dollars by banks amid a firming trend in the equity market, despite gains registered by the American currency overseas.
The Indian rupee resumed slightly higher at 45.05/06 per dollar as against yesterday's closing level of 45.08/09 and firmed up further to 44.95 before quoting at 45.02/03 at 1030 hours.
The domestic currency moved in a range between 44.95 and 45.06 per dollar in morning deals.
Fresh selling of dollars by banks on hopes of capital inflows from foreign funds in view of a firming trend in the equity market supported the rupee's rise against the greenback, a forex dealer said.
The Indian benchmark Sensex was up by 24 points, or 0.13%, in early trade.
However, the dollar rose against the euro in the New York market yesterday over fears that some euro zone states won't be able to withstand higher interest rates, though further gains will likely require the Federal Reserve to adopt a tighter policy.
In the Tokyo market, the euro fell for the third straight session against the dollar, with pressure likely to mount as investors remain unconvinced that Friday's European summit would quell concerns about the region's fiscal problems.