Mumbai: The rupee posted a moderate relief-rally against the US currency on Tuesday on light exporter dollar sales amid a slightly retreating dollar overseas.
The outlook remained uncertain due to rising crude oil prices and a slowdown in Foreign Institutional Investors (FII) inflows.
In cautious early trade at the Interbank Foreign Exchange market, the rupee opened on a firm note at Rs 46.34/37 per dollar and edged up further to Rs 46.33/34, higher from Monday's over 22 month closing low of Rs 46.39/40 per dollar.
A slightly weak dollar overseas fuelled a moderate pullback rupee rally early on Tuesday on the back of exporter dollar sales and unwinding of long dollar positions by banks, a forex dealer said.
However, rising crude oil prices and fears of slowdown in FIIs inflows could exert renewed pressure on the rupee, he added.
World crude oil prices shot-up to $72.04 a barrel in early Asian trade due to renewed supply concerns on Tuesday.
FIIs sold shares worth $44.60 million in the Equity market on June 22 and another $14.90 million on June 23.
The rupee tumbled by a whopping 27 paise on Monday to 46.39/40 per dollar, pulled down by hectic all-round dollar demand amid thin supplies.
Despite the early rupee rally, the currency runs the possibility of falling under renewed pressure due to customary month-end dollar demand.
Turning to cross currency trade, the Euro was quoted at Rs 58.46/48, Pound Sterling at Rs 84.64/66 and a Japanese Yen (100) at Rs 39.96/98.
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