Rupee Holds Firm as Fed Rate Hike Expectations Soar

The Indian Rupee has held onto its two-month high against the US Dollar, trading at around 94.95 on Wednesday.

However, it is expected to face selling pressure as the US Dollar has strengthened due to increasing expectations that the Federal Reserve will tighten its monetary policy this month.

The US Dollar Index (DXY) has risen by 0.13% to near 99.80, its highest level in over two weeks, according to strategists at Brown Brothers Harriman (BBH).

The Fed funds futures now 'price in 67% odds of a 25bps hike on September 16 and imply 60bps of tightening over the next twelve months', they said.