The rupee strengthened by 12 paise at 63.36 against the US dollar in early trade on Tuesday at Interbank Foreign Exchange on increased selling of the American currency by exporters.
Forex dealers said besides selling of the greenback by exporters, a higher opening in the domestic equity market, supported the rupee.
However, a firm dollar overseas capped the rise in the rupee to some extent, they added.
The rupee had gained 8 paise to close at 63.48 against the US dollar, after plunging to a 4-month intra-day low of 63.77 in Monday's trade, on fresh selling of the American currency by exporters and some banks.
Meanwhile, the benchmark BSE Sensex rose by 70.92 points, or 0.26 per cent, at 27,247.91 in early trade.