Dollar selling by exporters and banks amid a higher opening in the domestic equity market also supported the rupee, dealers said.
Euro rose against the American currency overseas ahead of the European Central Bank meets on August 2, they added.
The rupee had lost 24 paise to close at 55.58 against the dollar yesterday on heavy month-end dollar demand form oil importers even as stock markets had gained 300 points.
Meanwhile, the BSE benchmark index Sensex rose by 55.26 points, or 0.32 per cent, to 17,198.94 in early trade today.