The Indian rupee on Tuesday ended marginally higher against the American currency at 61.41 amid volatile trading on the back of a higher dollar overseas.
Earlier, the rupee resumed lower at 61.50 per dollar as against last Friday's close of 61.42 at the Interbank Foreign Exchange market. It then declined to 61.51 per dollar on dollar demand from banks and importers.
However, the rupee recovered afterwards to 61.37 per dollar on selling of dollars by banks and exporters tracking heavy foreign capital inflows into equity market. It finally settled at 61.41 per dollar, showing a marginal gain of one paisa or 0.02 per cent.
It hovered in a range of 61.37 per dollar and 61.51 per dollar during the day.
Heavy capital inflows and higher equities lifted the rupee sentiment, dealers said. The Indian benchmark Sensex rose by 292.20 points or one per cent to settle at 29,571.04.
The dollar index was down by 0.23 per cent against a basket of six major global rivals.
In New York, the US dollar was higher against its major rivals in the early trade, though the euro held onto modest gains, having bounced off an 11-year low as investors decided to take profits on extremely bearish positions.
Veracity Group, CEO, Pramit Brahmbhatt said: "Rupee traded in a thin range and ended flat just above previous close at 61.41. Rupee is expected to appreciate more in coming days tracking gains in local equities".
The trading range for the spot USD/INR pair is expected to be within 61.00 to 61.80, he added.