Dealers said a firming trend in the equity market and dollar selling by exporters and banks mainly supported the local unit.
Yesterday, the domestic currency had gained 28 paise to close at a one-week high of 55.36 against the dollar on the back of a surge in domestic stocks and dollar selling by exporters and banks.
Meanwhile, the BSE benchmark Sensex gained 165.24 points, or 1 per cent, to 16,619.54 in early trade.