The rupee recovered from its 16-month low to trade 15 paise higher at 67.97 against the US dollar in early session today, after opening 10 paise higher, on fresh selling of the dollar by exporters and banks.

Forex dealers said besides selling of the American currency by exporters and banks, weakness in the dollar against other currencies overseas supported the rupee.

Further, investor sentiment turned positive on easing trade woes between the US and China leading to a higher opening of the domestic equity market, boosting the domestic unit, they added.

On Monday, the rupee had lost 12 paise to close at a fresh 16-month low of 68.12 against the US currency on sustained dollar demand from importers and corporates amid weak global cues.

Meanwhile, the benchmark BSE Sensex was trading 43.50 points, or 0.12 percent, higher at 34,659.63 in early trade today.