Reuters Market Eye - The rupee is trading at 54.69/70 versus it previous close of 54.7150/7250.
Traders say rumours of a cut in the withholding tax for bonds leading to some selling the dollar.
Traders expect the pair to move in a 54.60 to 54.90 range during the session.
Rate decisions by central banks in Britain and the euro zone due later in the day will be watched for further direction.
(Reporting by Swati Bhat)
