Rupee trading at 55.97/99 from 55.9050/9150 close on Monday on the back of dollar demand from oil firms and other importers, though it is off a session low of 56.0850, its lowest in more than two weeks.
Traders expect the USD/INR to stay well bid on continued demand from oil firms, with trading also seen volatile as overall volumes remain low.
The BSE Sensex is up 0.9%.Traders on the lookout for RBI intervention if USD/INR rises much above the 56 mark, which is not far the record high of 56.52 hit on May 31.