MUMBAI: The Indian rupee treaded water on Wednesday as traders lowered their expectations for a quick resolution at a summit of euro zone leaders on Thursday to tackle Europe's sovereign debt crisis.
Gains in Asian currencies helped to hold the market up, traders said.
At 10:58 a.m. (0528 GMT), the partially convertible rupee was 44.4625/4650 per dollar, 0.07 percent stronger than Tuesday's close of 44.49/50.
"No cues are coming forth from the euro before the summit on Thursday. So despite positive stocks, we could see a very subdued dollar-rupee market," said a foreign exchange dealer at a state-owned bank.
Most traders expect the rupee in a tight 44.42-44.52 range.
German Chancellor Angela Merkel doused expectations for Thursday's emergency euro zone summit, saying the widespread longing for a single, final solution to make the Greek crisis disappear once and for all was unrealistic.
The euro was at $1.4137 versus $1.4176 when the rupee closed on Tuesday. The index of the dollar against six major currencies was down 0.03 percent at 75.198, but higher than 75.065 points when the local market closed on Tuesday.
Asian currencies gained against the dollar.
The one-month onshore forward premium was at 24.00 points from 25 points on Tuesday, while the three-month was 71.25 points from 70.25 and the one-year was at 225.25 points versus 227.25.
One-month offshore non-deliverable forward contracts were quoted at 44.65, 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 44.5150. The total volume was at $1.63 billion.
Copyright Reuters, 2011
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