The rupee hit a three-and-a-half month high of 53.22 in opening deals and is currently trading at 53.25/26 versus its Wednesday's close of 53.30/31 as expectations of dollar inflows for stake sales in state-run firms keep sentiment bearish.
The rupee's close below 53.34 support exposes 53.06, 61.8 per cent of October-November rally.
Traders, however, say month-end dollar demand from oil firms is likely to limit a very sharp fall in the pair with losses in most other Asian currencies also boosting the dollar.
Dealers will monitor moves in domestic shares for cues on the direction of foreign fund flows.
Copyright Thomson Reuters 2013