The rupee was trading strong at 66.37 against the dollar in the pre-noon session on fresh dollar selling by banks and exporters amid positive economic data.
Forex dealers said that besides dollar selling, a firm domestic equity market and weakness of the dollar against other currencies supported the rupee.
The dollar inched lower with investors sticking to the sidelines as the countdown begins on whether the Federal Reserve will hike interest rates for the first time in nearly a decade.
The euro edged up 0.1 per cent to $1.1350, holding on to last week's 1.8 percent gain. The dollar eased 0.1 per cent to 120.42 yen.
Against a basket of six major currencies, the dollar eased 0.1 per cent to 95.067.
The rupee opened strong by 14 paise to 66.40 against the dollar in early trade at the Interbank Foreign Exchange market today.
It further strengthened to 66.35 before being quoted at 66.37 at 11.20 am local time. The domestic currency moved in a range of 66.49 and 66.35 in the morning trade.
On Friday, the rupee had lost 11 paise at 66.54 against the US dollar on sustained demand for the American currency from banks and importers amid a higher greenback overseas.
Meanwhile, the benchmark BSE Sensex was trading up by 120.51 points or 0.47 per cent at 25,730.72.