DUBAI  - Saudi Arabia's riyal rebounded in the spot and forward foreign exchange markets early on Tuesday after CNN reported Riyadh was preparing to acknowledge the death of dissident journalist Jamal Khashoggi in a botched interrogation. 

Spot riyal, which had sunk to a two-year low of 3.7526 against the U.S. dollar on Monday, recovered to 3.7514. The riyal is pegged at 3.75 to the dollar so moves outside a 3.7498-3.7503 range are rare.

In the one-year forwards market, the dollar dropped to 50 points against the riyal -- returning to the range of the last few months -- from Monday's high of 100 points.

(Reporting by Andrew Torchia; editing by Richard Pullin) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))