The Indian rupee dropped slightly in early trade on Thursday tracking a weak opening of domestic sharemarket but soon recovered its losses as shares too turned positive while the dollar's drop versus majors also helped.
"The dollar index is down, so rupee will appreciate. Tracking a lower offshore stock market, it has opened slightly weaker," the chief dealer with a large private sector bank said.
At 9:05 am the partially convertible rupee was at 46.21/22 per dollar, marginally below its previous close of 46.17/18. The unit opened at 46.19 and has traded in a range of 46.19 to 46.25 so far.
The dollar stayed on the defensive on Thursday after the Fed reiterated its pledge to keep rates low, while the Australian dollar gained after the country's ruling party chose a new prime minister.
The index of the dollar against six major currencies was down 0.14 per cent and would be watched, dealers said.
Indian shares opened down marginally but soon turned positive.