At 10:13 a.m. (0443 GMT), the partially convertible rupee was at 45.3800/3850 per dollar, compared with 45.38/39 at Tuesday's close, after holding in a 45.3400-45.4150 range thus far in the day.

"There are good two-way demand in the market. It will be ranged because there are no clear directions," a dealer with a state-run bank said.

"It will depend on the flows in the market, and the way the equities are headed," he said, adding, he expects the rupee to trade in a narrow band of 45.30-45.45 during the day.

Indian shares rose 0.8 percent in early trade on Wednesday on bargain hunting by institutional investors after a three-day slide, but the overall mood was cautious amid lingering worries about the health of the global economy.

Most Asian currencies were weaker against the dollar. For a snapshot, see:

The euro wobbled around the top of its daily Ichimoku cloud on Wednesday, hurt by a lack of progress in talks over a common euro zone bond and weaker-than-expected German GDP, while the Swiss franc stayed under pressure on expectations of imminent action to curb its strength.

The European currency fell 0.2 percent after it failed to test a major resistance area at $1.4470-80, but support was found above its Tuesday's intraday low around $1.4355 and its 100-day moving average.

The euro was at $1.4399, compared with its $1.4368 close at the end of local forex trade on Tuesday, while the index of the dollar against six major currencies was at 73.997 points, compared with 74.115 points previously.

Traders said there was demand for dollar from oil importers.

India is estimated to owe around $4 billion to Iran for its oil imports and domestic oil firms have been aggressively buying dollars to make these payments.

Brent crude rose on Wednesday, staying above $109 a barrel as a larger-than-expected drawdown in U.S gasoline stocks last week trumped ongoing concerns over the euro zone debt crisis.

The one-month onshore forward premium was at 9 points from 10.25 points on Tuesday.

The three-month was at 37 points from 38.50 points and the one-year onshore forward premium was at 151.50 points from 153.75.

One-month offshore non-deliverable forward contracts were quoted at 45.51, 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 at 45.3900, 45.3825 and 45.3875, respectively. The total volume was at $1.4 billion.

Copyright Reuters, 2011