The rupee strengthened by 12 paise to 67.21 against the dollar in early trade today on fresh selling of the US currency by exporters and banks amid higher opening in the domestic equity market.
Forex dealers attributed the rise in the rupee to weakness of the dollar against other currencies overseas.
However, industrial output growing by 4.4 per cent in March, the slowest in five months, capped the rupee gains, they added.
On Friday, the rupee had settled almost flat at 67.33 against the US currency in highly volatile trade amid weak dollar cues.
Meanwhile, the benchmark BSE Sensex rose 37.19 points, or 0.10 per cent, at 35,572.98 in early trade on Monday.