The Indian rupee ended up marginally higher after hitting a near two-week high on Monday, as dollar demand from importers capped gains.
Asian markets got a lift as the dollar index, which measures the currency against six majors, slid 1% to fall below 108 due to a strengthening euro on hawkish cues by the European Central Bank.
The partially convertible rupee closed up 0.1% to 79.5225, after touching its highest level since Sept. 1 and recovering from a low of 79.7150 hit earlier.
However, the rupee's gains were not as significant as broader markets.