The rupee was trading at day's high as local stocks showed strong gains. The pair was at 54.22/2250 versus its close of 54.36/37 on Wednesday.
Stocks were up 0.8 percent, tracking global risk on.
Dealers said SAIL share sale-related flows helping the Indian currency. However, oil bids and month-end dollar demand may weaken the rupee to around 54.40 levels in late session.
The government will sell 240.4 million shares, or a 5.82 percent stake, in state-owned Steel Authority of India Ltd through an auction on March 22, the steel ministry said on Wednesday.
The euro has rebounded since hitting a four-month low of $1.28435 on Tuesday, as immediate fears about a financial meltdown in Cyprus eased, with the small island country pleading for aid from Russia.
