The rupee strengthened by 26 paise to 64.79 as the dollar edged away from last week's three-month highs, while the euro nursed losses after the European Central Bank and unrest in Spain's Catalonia led it to post its worst week this year.
The domestic unit opened strong by 14 paise at 64.91 at the Interbank Foreign Exchange market today. It hovered in a range of 64.94 and 64.79 before quoting at 64.85, up 20 paise at 4.35 pm local time.
The dollar index, which tracks the greenback against a basket of six major rivals, dipped 0.2 per cent to 94.775 but remained not far from Friday's three-month high of 95.150.
The euro inched 0.1 per cent higher to $1.1614, after plumbing a three-month low of $1.1574 on Friday, and losing 1.6 per cent for the week, its worst performance in 11 months.
The rupee sentiment was also buoyed on fresh selling of the US currency by exporters and banks amid stronger domestic equities. The dollar’s weakness against the euro and other currencies overseas following the ECB's move triggered the upmove, forex dealers said.
On Friday, the rupee had plunged 23 paise to close at 65.05 a dollar.
Meanwhile, the benchmark BSE index closed higher by 108.94 points or 0.33 per cent at 33,266.16.