Dealers said besides higher opening in local equities and selling of the US currency by exporters, euro's gains against the American currency on positive developments in Greece supported the rupee.
They said, steps taken by the Reserve Bank also helped the rupee to strengthen.
The rupee had gained 27 paise to close at 55.37 against the dollar in the previous session on Friday after RBI intervened on currency breaching the 56-level.
Meanwhile, the BSE benchmark index Sensex rose by 112.03 points, or 0.69 per cent, to 16,329.85 in early trade today.
