Unable to Set Prompt to current working DIR

HPUX does not recognise \h,\w,\u to display the hostname,working directory and username respectively.
So how do i set the PS1 variable to display my current working Directory as my prompt?

I also tried PS1=$PWD,
But it keeps showing the same directory path as prompt which PWD was holding at the time of assignment to PS1.

Try this in .profile

export PS1="[$LOGNAME@`/usr/bin/hostname | awk -F. ' { print $1 } '`]["'${PWD##*/}]>'

It will give format [user@hostname][current path]

or a more simple version:

export PS1=`uname -n`':$PWD \$ '

?
Of what command? either you use simply hostname either you get it from uname command (option -n ).

Absolutely normal:
This will be interpreted the first time, then the value is set...
to make it read each time, you will have to force the shell to read dollar sign as a char so it can assign each time a new value, look it the above two examples how it is achieved...