The rupee strengthened 14 paise to 71.19 against the dollar at the interbank forex market Thursday on increased selling of the American currency by exporters and banks.
Dealers said dollar's weakness against other currencies overseas amid fears of a slowing global economy and US government's record-long shutdown and early gains in domestic equity markets supported the rupee.
On Wednesday, the rupee had snapped its three-day losing streak and settled higher by 11 paise at 71.33 against the US dollar.
The benchmark BSE Sensex recovered by 28.27 points, or 0.08 percent, to 36,136.74 after rising to 36,178.36 in opening trade Thursday.