The rupee strengthened by 37 paise to trade at fresh two-week high of Rs 54.31 against the US dollar in early trade today at the Interbank Foreign Exchange on increased dollar selling by exporters and banks amid sustained foreign capital inflows.

A higher opening in the domestic equity market and the euro's strength against the dollar overseas also supported the rupee, dealers said.

The rupee had gained 31 paise to close at nearly two-week high of 54.