The rupee strengthened by 11 paise to 65.27 against the dollar due to dollar selling by banks and exporters.
According to forex dealers, weakening of dollar against other currencies overseas supported the rupee. Also, a firm domestic equity market aided the uptrend.
The domestic unit opened strong by 3 paise at 65.35 at the Interbank Foreign Exchange market today. It hovered in a range of 65.41 and 65.27 before quoting at 65.35, up 3 paise at 4.10 pm local time.
On Friday, the rupee had depreciated by 24 paise to end at 65.38 on persistent demand for the American currency from importers.
Meanwhile, the 30-share BSE index Sensex ended higher by 32.67 points or 0.1 per cent at 31,846.89.
The dollar steadied close to its highest level in ten weeks on Monday, with strong US wages data at the end of last week giving investors confidence that the Federal Reserve will hike rates in December and again after that.
The dollar index - which measures the greenback against a basket of six other major currencies - hit its highest since late July on the numbers, at 94.267. It traded close to that level on Monday, flat on the day at 93.789.