Mumbai: The rupee pulled back from a 2-1/2 week low touched earlier in the session due some dollar selling at higher levels.
At 2:35pm, the partially convertible rupee is at Rs 44.5250/5300 per dollar, weaker than Monday’s close of Rs 44.45/46, but stronger from 44.7050 touched in early trades, a level not seen since 31 March.
Traders said the early fall in the rupee may have been due to dollar buying related to Malaysia’s national oil corporation Petronas’s 11% stake sale in Cairn India to Vedanta Plc .
The dollar outflow is expected to happen over two days and is roughly pegged around $1 billion, market sources said.
Rupee may take further cues from movement in the euro which is currently at $1.4269 after skidding to a low of $1.4156 on Monday.
The euro found its footing against the dollar on Tuesday as it paused from the previous day’s sell-off, but debt problems in the euro zone continued to haunt the single currency, keeping it vulnerable to more losses.
The dollar held gains made the previous day, when risky assets were hit by a double whammy on mounting speculation that Greece will have to restructure its mountain of debt and Standard & Poor’s threatened to cut the United States’ prized AAA credit rating.
Volatile local shares would also be eyed for cues on the local unit.
The index of the dollar against six major currencies was down 0.15% at 75.391 points, higher than 75.350 at the close of the domestic forex market on Monday.