MUMBAI—The U.S. dollar was on Wednesday at its highest against the Indian rupee in nine-and-a-half months.
Investors are buying more of the U.S. currency expecting strong U.S. economic news to lead the Federal Reserve to taper economic stimulus. On Tuesday U.S. stocks climbed to a record following encouraging housing and consumer confidence data.
Around 0400 GMT the dollar was at 56.15 rupees compared with 55.96 rupees in late Asian trade on Tuesday.
The dollar rose as high as 56.17 rupees—a level not seen since early August.
Many Asian currencies and stock markets are trading down on Wednesday. The Bombay Stock Exchange's benchmark 30-share S&P BSE Sensex is off 0.3%.
Fed Chairman Ben Bernanke last week told Congress the central bank could start reducing its bond-buying program at one of its "next few meetings".
This will lead investors to shift positions to reflect a stronger dollar and a rise in U.S. Treasury rates, experts said.
