MUMBAI: The Indian rupee sat tight in thin trade on Tuesday as choppy local shares provided little direction and traders awaited euro zone manufacturing data for hints of the impact of the region's debt crisis on the global economy.
Partially convertible rupee was at 45.69/70 per dollar, marginally weaker from Monday's close of 45.67/68, when it had touched a near nine-month low of 46.10.
"It is an absolute quiet market and there is nothing much happening on the equity front as well," said a foreign exchange dealer with a large Indian corporate house.
"European market may provide the next trigger once the PMI (Purchasing Managers' Index) is released," the dealer said.
So far in trade, the rupee has moved in a 45.6250-45.7550 range and traders expect it to hold in the 45.60-45.80 band.
Movement in the euro after Tuesday's manufacturing data release may also influence the rupee's direction, traders said.
The euro was at $1.4377 from $1.4421 at the end of local forex trade on Monday, while the index of the dollar against six major currencies was 74.048 points, from 73.852 points previously.
The French, German and euro zone flash PMI readings for August were due at 0658 GMT, 0728 GMT and 0758 GMT, respectively.
Traders said Federal Reserve Chairman Ben Bernanke's speech on Friday in Jackson Hole, Wyoming, would also be watched closely.
Recent market turmoil and signs of weaker US growth have boosted expectations Bernanke may hint at more emergency stimulus for the economy.
Dollar buying by domestic oil refiners to clear outstanding import dues to Iran may also influence rupee movement, traders said.
India is estimated to owe around $5 billion to Iran for its oil imports and state-run banks have been buying dollars aggressively for the past few weeks to repay the outstanding balance.
According to Iranian media reports, India will settle all its oil debts to Iran by the end of this month.
The local benchmark share index was down 0.4 percent after a positive opening.
The one-month onshore forward premium was at 12.25 points from 12.50 points on Monday, the three-month was at 41 points from 41.50 points and the one-year stood at 155.50 points, from 155.
The one-month offshore non-deliverable forward contracts were quoted at 45.88, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 45.7025. The total volume was at $1.75 billion.
Copyright Reuters, 2011
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