Rising for the third straight day, the rupee strengthened by another 8 paise to 63.76 against the dollar in early trade on Thursday at the Interbank Foreign Exchange on sustained selling of the US currency by exporters and banks as the current account deficit shrank in the fourth quarter.
CAD narrowed sharply to $1.3 billion, or 0.2 per cent of GDP, on a sequential basis, mainly on account of a lower trade gap.
Forex dealers said a higher opening in domestic stock market supported the rupee, but the dollar's strength against other currencies overseas limited the gains.
The rupee had risen 8 paise to close at 63.84 against the greenback in yesterday's trade on persistent dollar selling by banks and exporters on hopes of foreign capital inflows amid a strong capital market.
Meanwhile, the benchmark BSE Sensex reclaimed the 27,000 mark by surging 159.64 points, or 0.59 per cent, to 27,000.14 in early trade on Thursday.