The rupee strengthened by 22 paise to trade at a fresh three-month high of Rs 49.05 a dollar at the Interbank Foreign Exchange market today.
Dealers said increased foreign capital inflows and the dollar’s loss against the euro in the overseas markets provided support to the rupee.
The domestic unit had surged by 19 paise to close at Rs 49.27/28 per US dollar in the previous session amid FII inflows into equities and continued selling of the American currency by exporters.
Meanwhile, the BSE benchmark Sensex rose 171.72 points or 0.99 per cent to 17,472.30 in early trade today.