The rupee strengthened by 16 paise to 46.45 against the US currency extending Friday's gains in early trade today on hopes of increased capital inflows into equity and dollar selling by exporters.Dollar's weakness against other currencies also supported the Indian rupee.At the Interbank Foreign Exchange (Forex) market the local unit appreciated by 16 paise to 46.45 a dollar. It had ended 7 paise higher at 46.61 in the previous session on Friday.