Reuters Market Eye - The rupee off the day's low of 57, the lowest since June 28, 2012, and trading at 56.85/86, weaker than its previous close of 56.7250/7350.
Traders say good dollar selling by foreign banks pulls the pair off the highs.
Some panic selling from exporters also seen around the key psychological level of 57 as RBI intervention feared.
Traders, however, expect the market to gain some stability around current levels ahead of the ECB rate decision later in the day and the U.S. non-farm payroll data on Friday.
(Reporting by Swati Bhat)