The rupee shed some early gains, tracking flat domestic stock markets and was last trading at 55.03/04 versus its 55.14/15 close on Friday.
The rupee rose to as much as 54.7650 after inflation slowed to 7.25 percent in June from a year ago, which momentarily boosted stock markets on hopes the RBI would consider a cut in interest rates at its July 31 policy review.
However, the BSE Sensex was flat on the day, after earlier gaining as much as 0.4 percent.
Traders cite caution as core inflation remains unchanged at around 4.85 percent from May levels, while Infosys dropped for a third straight day.
