MUMBAI: The Indian rupee was stronger on Monday tracking the euro's gains against the dollar, but was expected to remain rangebound with high oil prices preventing a sharper rise, traders said.
At 11:00 a.m., (0530 GMT) the partially convertible rupee was at 45.0525/0550 per dollar, 0.2 percent stronger than Friday's close of 45.13/14. It had traded in a range of 45.000-45.055 so far in the day.
"We are approaching the fiscal year-end. Unless there are some big one-off flows either in the export side or the import side, market should be pretty muted," a dealer with a private bank said.
"Psychologically, 45 is a good support. I would expect a range of 45.00-45.10 for the day."
The euro was at $1.4172 after hitting a four-month high of around $1.4184. The common European unit had been around $1.4125 at end of trade in local forex market on Friday.
The index of the dollar against six major currencies was down 0.1 percent at 76.615 points against 75.718 points on Friday.
High dollar demand from oil importers could limit the rupee's rise, traders said. Oil is India's biggest import item and domestic oil refiners are the largest dollar purchasers in the local currency market.
"There can be some demand for more covering by the oil companies," the chief dealer with a state-run bank said.
Brent climbed 1.5 percent on Monday towards $116 after western forces launched a military campaign against Libya, stoking fears that violence will intensify in North Africa and the Middle East, source of more than a third of the world's oil.
Indian shares dropped 0.4 percent on Monday morning, reversing early gains triggered by firm Asian peers, as firm oil prices weighed on the investor.
The one-month onshore forward premium was at 32.50 points, higher than Friday's close of 33.50, while the three-month premium was stable at 83.50 and the one-year climbed to 289.00 points from 288.50.
The one-month offshore non-deliverable forward contracts were quoted at 45.32, 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 45.1300, with the total traded volume at about $1.8 billion.
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