Recovering from its initial losses, the rupee was trading higher by 5 paise at 63.56 against the American currency in late-morning deals amid bouts of dollar selling by banks and exporters as well as stronger equities.
Earlier, the rupee opened lower at 63.64 per dollar at the Interbank Foreign Exchange (forex) as against 63.61 previously. It slid further to 63.66 on bouts of dollar demand from importers before quoting at 63.56 at 1201 hours.
The local unit moved in a range of 63.66 and 63.56 in morning deals.
Overseas, the US dollar stayed flat in early Asian trade as the market geared up for a flurry of US data that could bolster expectations that the Fed would lift rates sooner than later.
Meanwhile, the benchmark Sensex rallied 57.71 points, or 0.21 per cent, to 28,078.58 mid session.