Rupee off lows as euro retreats

The rupee is off lows as euro retreats and dollar demand ebbs. The local unit is trading at 54.05/06 after falling earlier to 54.37 vs its previous close of 54.01/02.

Several dealers say dollar demand by a large fund house to meet redemption needs was the key reason behind early fall in the rupee, which then declines on the absence of additional USD buyers and on foreign fund flow-related dollar selling.

Euro close to four-month highs against the yen and the dollar, though some traders think the single currency's rally since late July may run out of steam soon.