The Indian rupee halted its six-day rally on Monday, following its biggest weekly gain in 13 years, but traders were keenly watching the local share market for cues on fund flows.
At 10:20 a.m. (0450 GMT), the partially convertible rupee was at 47.40/41 per dollar, 0.6 percent below its Friday's close of 47.11/12. It rose as high as 46.90 during trade on Friday, its highest since Dec. 19, 2008.
"With month-end dollar demand around the corner, there is some profit-taking in the market after the sharp rally last week," a senior dealer at a private bank said.
"Today it is likely to be in a 47.30-47.50 range. I reckon it would go back to 47.60-80 levels first, before we can see it heading back to sub-47 levels, as the 49.40 to 46.90 rally looks a bit overdone and needs some correction," he added.
The rupee rose 4.9 percent last week after the Congress-led coalition's resounding election win raised expectations for economic reforms and greater foreign investment.
Demand for U.S. dollars generally rises at the end of each month when importers and refiners buy dollars to make payments for their imports, weakening the local unit in the spot market.
