Reuters Market Eye - The rupee is not far from its record low of 58.98 hit last week. The rupee is at 58.41/42 versus 57.87/88 at Monday's local close.
A large private corporate USD seller is capping gains for the pair, say several dealers.
The pair faces resistance at 58.42, which, if it holds good, may result in a downmove to 58.05 levels, says a senior trader with a foreign bank.
Local stocks down 0.4 percent, in line with MSCI ex-Japan index losses.
USD/INR NDFs surge overnight, closing NY trade at 58.56-58.59.
The local currency may find some comfort from RBI's concerns about the impact of the falling rupee on imported inflation.
The U.S. dollar hovered above a two-month low against the yen on Tuesday but uncertainty ahead of the outcome of the U.S. Federal Reserve meeting is likely to cap further gains.
(Reporting by Subhadip Sircar)
