dollar selling, which helped overcome the initial losses due to negative local shares.
At 11:10 a.m., (0540 GMT), the partially convertible rupee was at 50.6700/6725 per dollar, marginally stronger than Wednesday's close of 50.7350/7450, when it had dropped to 50.96 -- its weakest since March 31, 2009.
The rupee has moved in a 50.65 to 50.8650 band so far in the session.
"Market is broadly looking at the euro movements to have an idea about risk appetite globally. There was also some corporate dollar selling in the morning which helped the rupee recover," said Hari Chandramgathan, a foreign exchange dealer with Federal Bank.
"I expect a range of 50.60-50.85 for the day".
The BSE Sensex fell 0.2 percent in early trade, led by losses in Reliance Industries and Larsen & Toubro, after the corporate earnings season failed to provide any cheer to investors.
Traders said oil refiners, the largest buyers of dollars in the domestic currency market, would likely step in to cover import commitments around current levels, which could pressure the rupee downwards in later trade.
The RBI will be careful about using foreign exchange reserves excessively to protect depreciation of the rupee, Subir Gokarn, a deputy governor of the Reserve Bank of India, told CNBC TV channel on Thursday.
The euro hit five-week lows versus both the dollar and the yen on Thursday as bond market turmoil spread across Europe, sparking calls for the European Central Bank to intervene more forcefully in markets.
The euro was trading at $1.3479, from $1.3467 when the rupee closed on Wednesday, while the index of the dollar index was at 78.197 points from 78.222 points.
The one-month onshore forward premium was at 29 points from 30.25 on Tuesday, the three-month was at 72.75 points from 74.50 and the one-year was at 187.25 points from 183.75.
The one-month offshore non-deliverable forward contracts were quoted at 51.02, weaker than the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 50.7650, with the total volume at $977 million.
(Reporting by Swati Bhat and Shamik Paul; Editing by Aradhana Aravindan)
