The Indian rupee ended weaker on Monday, unwinding early gains on a fall in the stock market and as traders squared open positions ahead of an expected cut in US interest rates.
The US Federal Reserve is widely tipped to lower its federal funds rate on Tuesday by 25 basis points to 5 percent, but some analysts expect a deeper cut to help the economy weather a housing downturn and a credit crunch.
The partially convertible rupee ended at 40.56/57, nearly a quarter of a percent down from Friday's close of 40.45/46. The rupee hit a nine-year high of 40.20 in July. "The negative stocks provided the initial trigger," said a local trader at a private bank.