Mumbai: The rupee strengthened 8 paise to 64.35 against the dollar on Friday on heightened selling of the US currency by exporters and banks, with stronger domestic stocks providing support.

The dollar hit a nearly two-year low against the euro after the head of the European Central Bank said tapering of its stimulus will be on the table this autumn.

A higher opening in the domestic equity market contributed to the upside.

On Thursday, the rupee had lost 15 paise to close at 64.43 a dollar on the back of fresh demand for the American currency from importers and banks.

Meanwhile, the benchmark Sensex rose 131.48 points, or 0.41 per cent, to 32,035.88 in early session on Friday.