Reuters Market Eye - The rupee is trading at 60.03/04 versus its Monday's close of 60.11/12, off the session highs of 59.80 levels, in cautious trading before the U.S. Federal Reserve releases minutes from its March meeting.
"The market is cautious, though it is currently assuming the FOMC minutes to be less hawkish than the press conference in March," a senior trader with a foreign bank said.
Traders also said some defence-related dollar demand pushed USD/INR higher.
USD/INR has bounced back after hitting an eight-month low of 59.5950 on April 2 as shares have retreated from record highs during the corresponding period.
The Sensex is up 0.5 percent and will be watched for cues on foreign fund flows.
(Reporting by Archana Narayanan)