Rupee steady; euro zone summit awaited

Rupee steady; euro zone summit awaited

Mumbai: The 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 10:58am, the partially convertible rupee was 44.4625/4650 per dollar, 0.07% 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% 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.