The Indian rupee is off lows as euro retreated and dollar demand ebbed. The local unit is trading at 54.05/06 after falling earlier to 54.37, from its previous close of 54.01/02 to the dollar.
Several dealers said that dollar demand by a large fund house to meet redemption needs was the key reason behind early fall in the rupee, which then declined on the absence of additional USD buyers and on foreign fund flow-related dollar selling.
Euro is now close to four-month highs against the yen and the dollar, though some traders expect that the single currency's rally since late July may run out of steam soon.
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