The rupee firmed up 16 paise to 66.86 against the dollar in early trade on Friday on fresh selling of the US currency by exporters and banks amid a higher opening in the domestic equity market.
Forex dealers said weakness in the dollar against other currencies overseas supported the rupee.
Further, foreign fund inflows and a higher opening in the domestic equity market gave the uptrend some momentum, they added.
On Thursday, the domestic unit ended below the psychological 67-mark, falling 13 paise to hit over two-week low of 67.02.
Meanwhile, the benchmark BSE Sensex rose 258.59 points or 0.91 per cent to 28,671.48 in early session on Friday.