Forex dealers said a higher opening in the stock market also helped the local unit to recover after four sessions of losses. However, strong dollar overseas against euro on disappointing US jobs growth figures capped rupee's gains.
The rupee had lost a hefty 50 paise to close at 55.92 against the dollar on Monday on persistent dollar demand.
In the last four days, the rupee has tumbled by 154 paise or 2.83 per cent.
Meanwhile, the BSE benchmark index Sensex recovered by 79.20 points, or 0.45 per cent, to 17,471.18.