Rupee to start up on dollars broad drop, shares key

The rupee is expected to open stronger on Tuesday tracking the dollar's losses overseas, but the domestic sharemarket performance would be key for direction.

The index of the dollar against six major currencies was down 0.2% at 74.897 points at 0250 GMT, and below 75.379 when the local forex market closed on Monday.

The euro extended gains in early Asian trade after remarks by the head of the eurozone bailout fund that the facility's guarantees will be raised triggered short-covering, though its advance could stall ahead of a confidence vote on the government in the Greek parliament.

Almost all Asian currencies were stronger versus the dollar.

Traders expect the rupee to open around 44.95 to the dollar and move in a 44.90 to 45.10 band, with a possibility of slipping to 45.25 if shares remain weak through the day.

The rupee had ended at 45.00/01 on Monday, after falling to 45.06 - a level last seen on May 31, and 0.3% weaker than Friday's close of 44.86/87.

The MSCI index of Asian stocks ex-Japan was up 0.4%, while the Nifty futures traded in Singapore were down 0.1%, suggesting a flat to slightly lower start to the local market.