Rupee up tracking Euro, yields rise

The rupee strengthened on Wednesday, tracking the euro and Asian peers, as the view that the Euro zone summit on Thursday would likely outline a solution to the region's deepening debt crisis gathered steam, but negative local shares weighed.

The partially convertible rupee ended at 44.45/46 per dollar, 0.1% stronger than Tuesday's close of 44.49/50, after moving in a 44.4450-44.5000 band intra-day.

The euro was at $1.4222 at the end of local forex trade versus $1.4176 on Tuesday, while the index of the dollar against six major currencies was down 0.51% at 74.837 points from 75.065 points.

Bond yields rose for a second session on Wednesday as higher global oil prices and US yields weighed, while traders continued to speculate on whether or not the central bank will raise rates at its policy review next week.

The 10-year benchmark bond yield closed up 2 basis points at 8.28% after trading in a range of 8.25-8.28% during the session.

Total volumes on RBI's electronic trading platform were slightly lower at 7,975 crore ($1.8 billion), compared with the normal 9,000-10,000 crore.

The benchmark five-year swap rate closed up 3 bps at 7.53% while the one-year rate ended 4 bps high.