MUMBAI, Sept 1 Reuters The Indian rupee was trading higher to the U.S. currency on Thursday, as falling oil prices and lack of interest to build long dollar positions helped the local unit recover early losses.

The rupee was trading at 79.31 per U.S. dollar by 0544 GMT, compared with 79.45 in the previous session. The rupee opened at 79.5250 and had fallen to as low as 79.66.

The rupee is yet again doing better that other Asian currencies, and the bias has slightly shifted to selling the pair USDINR on rallies, said a trader at a Mumbaibased bank.

The Korean won tumbled more than 1, while the Chinese yuan, the Indonesian rupiah and the Thai baht dropped between 0.2 to 0.5.

The trader put down rupee39;s relative outperformance to oil prices and the lack of appetite of speculators to buy dollars.

Oil prices declined on Thursday, taking its losses over last three sessions to almost 10 on concerns over demand.

Some economists cutting India39;s growth forecast on the back of a lowerthanexpected June quarter gross domestic product reading had little impact on the rupee.

Rupee39;s volatility remains muted despite risks from the U.S. Federal Reserve39;s hawkish stance. The Fed had signalled that it will not temper down the pace of rate hikes until inflation is under control, and that a cut in borrowing cost next year was unlikely.

On Wednesday, Cleveland Fed chief Loretta Mester said that the U.S. central bank will need to raise interest rate above 4 by early next year…