Besides, dollar selling by banks and exporters amid euro strengthening the American currency overseas after the European union reaffirmed its commitment to use its bailout funds flexibility also supported the rupee.
The rupee closed at 56.80 in yesterday's trade, a rise of 35 paise, or 0.61 per cent, its biggest percentage gain in two weeks.
Meanwhile, the BSE benchmark index Sensex surged by 269.49, or 1.58 per cent, to 17,260.25 in early trade today.