Rupee hovering around 56 versus dollar

Reuters Market Eye - The rupee was hovering around the 56 mark as exporters rush in to sell, pulling the local unit down to 55.88/89, below its close of 55.5675/5775 on Monday.

Traders say heavy dollar demand from oil and defence firms and also from some custodian buying by two large foreign banks hurting the rupee.

Exporters, however, are likely to sell the greenback around 56 levels, preventing a very sharp rise in the USD/INR pair during this session, traders say.

A fall in other Asian currencies and broad gains in the dollar versus major currencies also helping the pair, traders say.

(Reporting by Swati Bhat)