The local currency had gained 17 paise to close at three-month high of 66.37 in Wednesday's trade.
Rising for the fifth day, the rupee strengthened by 6 paise to 66.31 against the US dollar in early trade on Thursday on continued selling of the American currency by banks and exporters amid increased foreign fund inflows.
Forex dealers said besides sustained selling of the greenback by banks and exporters, a higher opening of the domestic equity market backed up the rupee at the Inter-bank Foreign Exchange.
However, the dollar's strength against other currencies overseas capped the rupee's gain, they added.
The local currency had gained 17 paise to close at three-month high of 66.37 in Wednesday's trade.
Meanwhile, the benchmark BSE Sensex rose 79.94 points, or 0.32 per cent, to 25,418.52 in early trade.
