Rupee weakens to near 1-month low on Fed worries

Report suggest Federal Reserve could raise interest rates earlier than expected

The rupee weakened to its lowest in nearly a month on Wednesday tracking falls in emerging markets due to worries the US Federal Reserve would raise interest rates earlier than expected, although exporters' dollar sales capped broader falls.

 

Emerging markets tracked falls in Wall Street and a rise in US bond yields after a San Francisco Federal Reserve Bank paper released on Monday showed investors underestimated the speed at which the Fed might raise interest rates.

 

That raised concerns the US central bank could signal an earlier-than-expected rate hike at its next policy meeting on Sept 16-17.

 

The partially convertible rupee traded at 60.8850/8950 per dollar, its weakest level since Aug 14, at 12:50 pm. The rupee had ended trade on Tuesday at 60.60/61.

 

Traders expect the rupee to hold in a 60.70 to 61.00 to a dollar range in the rest of the session.