Domestic unit had lost 14 paise to close at 65.44 per dollar on fresh dollar demand from importers.
FIIs head home whenever the Fed raises interest rates and this affects the rupee.
Mumbai: The rupee strengthened by 5 paise to 65.39 per dollar in early trade today on some selling of the US currency by exporters and banks. Stock markets opening with gains also boosted the domestic currency, dealers said.
The rupee had lost 14 paise to close at 65.44 per dollar on fresh dollar demand from importers. In global trade, the US dollar had strengthened against major world currencies with the dollar index inching up by 0.08 per cent against a basket of currencies yesterday.
Meanwhile, the benchmark BSE Sensex recovered 147.50 points, or 0.50 per cent, to 29,315.18 points in early trade today.
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