The Indian rupee on Monday weakened to a one-week low against the US dollar, tracking the losses in its Asian peers after comments by US Federal Reserve speakers on last Friday raised the possibility of a September rate hike.

Traders are also cautious ahead of the gross domestic product (GDP) data for the June quarter and fiscal deficit data for July on 31 August. According to Bloomberg analyst estimates, GDP may be at 7.5% from 7.9% in the March quarter.

The home currency closed at 67.18 per dollar—a level last seen on 22 August, down 0.18% from its previous close of 67.06. The rupee opened at 67.14 per dollar and touched a low of 67.21, a level last seen on 22 August.

The 10-year bond yield closed at 7.123%, compared with its Friday’s close of 7.129%. Bond yields and prices move in opposite directions.

India’s benchmark Sensex index rose 0.43% or 120.41 points to closed at 27,902.66. So far this year, it has gained 6.83%.

Most Asian currencies markets slipped after Fed chair Janet Yellen indicated that an interest rate increase remains on the cards for this year.

The case for a rate hike has strengthened in recent months, with a lot of new jobs being created, and economic growth is looking likely to continue at a moderate pace, Yellen said in a speech at the Fed’s annual monetary policy conference in Jackson Hole, Wyoming, on Friday.

While Yellen did not give guidance on what the central bank needs to see before raising rates, she said the Fed already thinks it is close to meeting its goals of maximum employment and stable prices. She described consumer spending as “solid” but noted that business investment was weak and exports hurt by a strong dollar, Reuters reported.

South Korean won was down 1%, Malaysian ringgit 0.7%, Indonesian rupiah 0.42%, Japanese yen 0.34%,Taiwan dollar 0.22%, Philippines peso 0.18%, China renminbi fell 0.17% and Singapore dollar 0.13%. However, Thai Baht was up 0.18% and China offshore was up 0.04%.

The rupee is down 1.5% till date this year, while foreign institutional investors (FIIs) have bought $5.78 billion in equity and sold $1.19 billion in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.7, up 0.14% from its previous close of 95.566.

Sources :.livemint.com