MUMBAI: The rupee strengthened on some bunched up dollar inflows in early Monday trade, but the lack of directional cues from other regional peers and a choppy domestic stock market capped further gains. At 11:20 a.m. (0550 GMT), the partially convertible rupee was at 46.37/38 per dollar, stronger than its 46.50/51 previous close last Thursday. Indian financial markets were shut on Feb. 12 for a local holiday. Most Asian markets are shut on Monday and Tuesday for Lunar New Year holidays, while New York is shut on Monday for the Presidents Day holiday. "Rupee is stronger due to lack of outflows due to New York being shut and also some bunched up dollar inflows on account of Friday's holiday, that is causing some selling in the market," a senior dealer with a private bank said. Dealers said the market would be rangebound in lacklustre trade in the absence of fresh triggers, with inflation data for January due around noon watched for further direction. India's annual wholesale price inflation in January is seen at 8.21 percent, according to a Reuters survey. This compares with an annual rise of 7.31 percent in December. Fuel costs in India flared up in late January and food prices rose for a third straight week, data last Thursday showed,, while last Friday's data revealed India's industrial output smashed forecasts to grow at its fastest pace on record in December. Indian shares were choppy in early trade providing little direction to the rupee. The euro hovered near 9-month lows against the U.S. dollar on Monday, as doubts whether policymakers in the eurozone will help debt-laden Greece intensified, prompting investors to add to long positions in the greenback. One-month offshore non-deliverable forward contracts were quoted at 46.34/44, little changed from the onshore spot rate. In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were both quoting at 46.40, with the total traded volume on the two exchanges at about $975 million.

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