The Indian rupee appreciated 8 paise to 72.54 against the US dollar in early trade on Tuesday amid improved risk appetite and the broad weakness of the greenback in the overseas market.
At the interbank foreign exchange, the domestic unit opened at 72.57 against the dollar, then inched higher to 72.54, registering a gain of 8 paise over its previous close.
On Monday, the rupee had settled at 72.62 against the US dollar.
The rupee started on a flat to stronger note this Tuesday against the dollar, tracking the overall weakness of the dollar. Absence of RBI and improved risk appetite in the region could lend support to the currency, Reliance Securities said in a research note.
Most Asian currencies have started mostly flat to stronger against the US dollar this morning and could aid the local unit, the note added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.03 per cent to 89.80.