The rupee quoted at 49.83 against the euro in the Indian market -- roughly on expected lines. The dollar was quoted at 42.46/47. In early trades, the local currency strengthened by 1 paise to 42.46 from its previous close of 42.47/48.

Most bankers are bullish on the euro. ABN Amro Bank dealer-treasury chief Ravi Kumar said: "Corporates are interested in striking deals in euros. They are, however, going slow as only the Indian and Chinese markets traded on Friday."

According to Ravi Kumar, ABN Amro Bank was the first bank to strike an interbank deal in the euro after trading began. ABN Amro Bank clinched a deal worth five million euros with another foreign bank against the dollar at the rate of 1.1740 per dollar on a back-to-back basis. The Dutchbank also arranged a smaller deal for a corporate house worth 15,000 euros against the rupee when the local currency was holding at 42.4650/47 against the dollar.

Deutsche Bank concluded an interbank deal worth one million euro at the rate of 1.1740. According to Deustche Bank sources, only two interbank deals in the euro were conducted on Friday. "We did not receive any enquiry from corporates, Friday being a holiday," sources said.

Officials at ANZ Grindlays Bank refused to divulge any information on deals concluded by them in the new European common currency, but said "we are receiving lots of corporate enquiries."

BankAm on Thursday arranged a euro deal worth ecu 0.5 million for Larsen & Toubro, after the European Central Bank fixed euro quotes against other currencies. According to BankAm officials, the ecus will later be converted and sold in euros after January 4, when the world financial markets officially open after the New Year and weekend holidays to trade in the new currency.

Not one to beleft behind, State Bank of India (SBI) struck a deal worth 5 million euro with ABN Amro Bank against the dollar. SBI officials said: "We have also arranged a few corporate deals in the new currency on Monday."

Most state-run and private sector banks have in the meanwhile adopted a cautious approach as they are not very sure in which direction the currency will move.

"We will not plunge into euro trading right away as we expect the euro to be highly volatile once trading in the currency begins. However, we have decided to cover all corporate transactions in the new currency, which comes our way," said a dealer with a nationalised bank. Thursday's closing rate for the dollar was 1.1735 against the euro, 132.90 against the yen, 0.7105 against the pound sterling and 1.6096 against the Swiss franc.