The Fed is meeting next week to take a call on this. A higher US rate means flight of investors from emerging markets in search of higher returns.
Apart from the increased demand for the American currency from importers and banks, its strength against other currencies overseas pulled down the rupee.
A lower opening in the domestic equity market did not help things.
Yesterday, the rupee had weakened 4 paise to 66.71 in a relatively muted trade on renewed demand for the greenback.
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