The rupee had resumed higher at 52 per dollar at the Interbank Foreign Exchange (Forex) market and moved in a range of 51.86-52.10, before quoting at 51.97 at 1045 hrs.
Banks and exporters preferred to reduce their dollar position in view of persistent capital inflows from foreign funds into equity market.
The BSE benchmark Sensex rose by 175 points, or 0.92 per cent, to 19,043.78 at 1100 hrs on hopes of further economic reforms from the government.
Meanwhile, in New York market, the dollar gained against the euro and rose further versus the Japanese yen yesterday after a pair of US economic reports came in better than expected.