ET:Indian rupee near steady; euro zone turbulence fear weighs
MUMBAI: The Indian rupee sat tight on Wednesday as domestic equities turned choppy and as traders feared the euro was lined up for some more volatility in coming days.
The International Monetary Fund's acting head John Lipsky said on Tuesday euro zone's partners were concerned about the potential for the crisis in the zone's peripheral economies to spread to core countries.
Greece is under a tight deadline to approve a new package of unpopular reforms to qualify for aid and avoid plunging into bankruptcy.
Separately, the IMF also said Spain faces considerable risks to its recovery and must deepen and conclude reform work to allay market concerns.
At 11:06 a.m. (0536 GMT), the partially convertible rupee was at 44.82/83 per dollar, little changed from Tuesday's close of 44.84/85.
"We are not really sure what is going to happen in the euro zone," said a forex dealer at a foreign bank.
"So we are witnessing light trading with no clear direction in the dollar-rupee market."
Most traders, therefore, expect the rupee to move in 44.75-44.95 band on Wednesday.
The euro was at $1.4376, down from a high of $1.4432, while the index of the dollar against six major currencies was up 0.23 percent at 74.715 points.
The euro had been at $1.4357 and the dollar index at 74.823 points when trading closed in the local forex market on Tuesday.
The euro ran into profit-taking in Asia on Wednesday after the Greek government as expected won a vote of confidence in parliament, but further losses may be limited as the market's focus turns to the Federal Reserve and its comments on the slowing U.S. economy.
The Fed's rate decision is due at 1630 GMT and it is widely expected to reiterate commitment to keeping interest rate low given the weak economic data.
The benchmark share index was up just 0.02 percent after rising as high as 0.7 percent in early trade before turning negative briefly.
The one-month onshore forward premium was at 24.25 points versus 25.25 at last close. The three-month was at 74.75 points from 72.75 and the one-year was at 245.75 points from 241.75.
One-month offshore non-deliverable forward contracts were quoted at 45.01, 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 44.8825. The total volume was at $1.21 billion.
