Rupee continues to trade stronger at 54.53/54 versus its previous close of 54.68/69, helped by gains in the domestic sharemarket and tracking losses in the greenback versus the euro and some other Asian currencies.
Domestic shares trading up 0.3 percent.
Traders are awaiting a critical vote on foreign direct investment in multi-brand retail due in the lower house of parliament later in the day.
The pair is expected to break below 54.25 and gradually below 54 if FDI is approved.
The euro climbs to a seven-week high against the dollar, boosted by efforts to tackle the debt problems of Greece and Spain, while the dollar under pressure from expectations of new bond buying by the Federal Reserve.