Mumbai: The rupee on Monday erased all the gains and closed over fresh one month low as traders turned cautious ahead of the Federal Reserve meeting that begins on Tuesday.

The rupee closed at 64.14 a dollar—a level last seen on 18 August, down 0.09% from its Friday’s close of 64.08. The home currency opened at 64.07 a dollar and touched a high and a low of 64 and 64.15 respectively.

Currently, market pricing of a Fed hike by year-end stands just below 50% and traders expect Chair Janet Yellen to keep her options open for December. Main focus will be on the policy makers’ view on 2018 rate-hike plans as balance-sheet reduction is already priced in, Bloomberg reported.

Bond yields hit a fresh 15-week high. The 10-year bond yield closed at 6.610%—a level last seen on 6 June, compared to its previous close of 6.597%. Bond yields and prices move in opposite directions.

The benchmark Sensex index rose 0.47% or 151.15 points to closed at 32,423.76. So far this year, it has risen over 22%.

So far this year, the rupee has gained 6%, while foreign institutional investors (FIIs) have bought $6.61 billion and $20.33 billion in equity and debt, respectively.

Asian currencies were trading lower. China offshore spot was down 0.37%, Japanese yen 0.35%, China renminbi 0.27%, Taiwan dollar 0.14%, Indoensian rupiah 0.11%. However, South Korean won was up 0.45% and Philippines peso 0.28%

The dollar index, which measures the US currency’s strength against major currencies, was trading at 91.828, down 0.05% from its previous close of 91.872.

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