The rupee strengthened by 14 paise to 46.20 against the US currency in early trade today on expectations of fresh capital inflows and dollar selling by exporters.
Dollar's weakness against other major currencies also supported the domestic currency.
At the Interbank Foreign Exchange (Forex) market, the local unit appreciated by 14 paise to 46.20 a dollar. Rupee had ended three paise lower at 46.34/35 in the previous volatile session.
Forex dealers said hopes of increased capital inflows into domestic equities by foreign funds and dollar's weakness overseas, mainly supported the rupee.
Yesterday, the Bombay Stock Exchange benchmark Sensex ended 28.36 points, or 0.16 per cent lower.
