MUMBAI: The Indian rupee rose on Wednesday, snapping two straight days of fall, in tandem with gains in local shares and most Asian currencies.
At 10:45 a.m. (0515 GMT), the partially convertible rupee was at 44.6100/6125 per dollar, 0.2 percent stronger than Tuesday's close of 44.7050/7150.
The unit moved in 44.58-44.65 range so far in the day and is expected to stay in a band of 44.52 to 44.65.
Traders may, however, sidestep slight gains in the euro as most still expect more volatility in the unit as the euro zone battles a debt crisis.
"Swings in the euro have been too huge and it may fall once again," said a foreign exchange dealer with a private sector bank.
The underlying caution on the euro also weighed on trading interest in the dollar-rupee market, traders said.
The euro edged up after data showed strong Chinese growth. However, the single currency remained under pressure ahead of yet another emergency meeting of European Union leaders.
The euro was at $1.3989 versus $1.3910 at end of local forex trade on Tuesday. The index of the dollar against six major currencies was up 0.22 percent at 75.980 points, but below 76.390 when the domestic currency market closed on Tuesday.
India's benchmark share index climbed over 0.6 percent, with financials leading the gains, taking cues from firm Asian markets.
Most Asian currencies also gained against the dollar.
The one-month onshore forward premium was at 23.50 points from 24.25 on Tuesday, while the three-month was at 70.50 points from 68.75 and the one-year was at 233.75 points versus 230.75.
One-month offshore non-deliverable forward contracts were quoted at 44.75, 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 44.7150. The total volume was at $2.02 billion.
Copyright Reuters, 2011
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