The Indian rupee rose by 5 paise at 66.39 against the US dollar in early trade on Tuesday on fresh selling of the American currency by exporters.
Besides, weakness in the dollar against other currencies supported the rupee, forex dealers said.
However, a lower opening in the domestic equity market, capped the gains, they added.
The rupee had tumbled by 68 paise at nearly 8-week low of 66.44 against the US dollar on Monday at the Interbank Foreign Exchange market on persistent demand for the American currency from some banks and importers amidst sharp fall in equities.
Meanwhile, the benchmark BSE Sensex dipped below the 26,000-mark by falling 134.27 points, or 0.51 per cent, at 25,987.13 in early trade.