The rupee resumed higher at Rs 51.84/85 per dollar on the Interbank Foreign Exchange, as against its previous close of Rs 52.20/21 per dollar, and moved up further to Rs 51.72 per dollar before quoting at Rs 51.77/78 per dollar at 1030 hours.
The domestic currency moved in a range between Rs 51.72 and Rs 51.85 per dollar during morning deals. Fresh selling of dollars by banks and exporters in view of a lower dollar in overseas markets mainly boosted the rupee sentiment, a forex dealer said.
In New York, the US dollar dropped against the euro and other major currency rivals yesterday after the world's major central banks moved to cut borrowing costs for banks and strengthen existing swap lines.
The dollar index, which measures the US unit against a basket of six major currencies, dropped to 78.345, from 78.990 previously.
Meanwhile, the BSE benchmark Sensex shot up by 461 points, or 2.86 per cent, in early trade.