The Indian rupee on Monday erased initial losses and edged one paisa higher at 62.02 versus the greenback on late dollar selling by exporters and some banks, snapping a two-day losing trend.
After the opening weak, the rupee hit a fresh nine-month low of 62.25 against US dollar as traders reacted to government easing curbs on gold imports and economic growth for the second quarter coming at a tepid 5.3%. However, the rupee erased the losses and closed marginally higher.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced sharply lower at the day's low of 62.25 a dollar from last weekend's close of 62.03.
The mood was a bit cautious ahead of RBI policy review. Later, it rebounded on dollar selling by some banks and exporters and closed at the day's high of 62.02, a gain of one paisa or 0.02%.
In the previous two sessions, it had lost 19 paise.
The rupee had little help from local equities on Monday. The Indian benchmark S&P BSE Sensex closed lower by 134.37 points, or 0.47%.
There was support for the local currency from Sebi data that showed FPIs/FIIs infused USD 396.24 million on Friday.
The dollar index, a gauge of six major global rivals, was down by 0.15%. Oil prices fell to a five-year low and even gold rates fell as global investors were risk-averse.
"Over this week, we expect the pair to trade within a range of 61.60/80 and 62.30/40 levels on the spot. RBI monetary policy and US November jobs report will be key data points," said Anindya Banerjee, currency analyst, Kotak Securities.
Pramit Brahmbhatt, CEO, Veracity Group said, the trading range for the spot rupee is expected to be within 61.60 to 62.40.
In the forward market, premia closed steady-to-weak on stray receipts from exporters.
The benchmark six-month premium payable in May ended at its last Friday's closing level of 224-226 paise while forward contracts maturing in November, 2015, softened to 433.5-435.5 paise from 435-437 paise.
The Reserve Bank of India fixed the reference rate for dollar at 62.1377 and for the Euro at 77.3677.
The rupee fell back against the pound to 97.48 from last weekend's close of 97.34 while moved down further to 77.31 per euro from 77.29.
It, however, improved further to 52.36 per 100 Japanese yen from 52.48 last Friday.