MUMBAI, March 8 Reuters The Indian rupee weakened on Wednesday, as a hawkish tone by Federal Reserve chair Jerome Powell stoked concerns about interest rates being hiked by 50 basis points bps again as soon as this month.

Resuming trade after a oneday holiday, the rupee fell to 82.1275 per dollar by 1034 a.m. IST compared with its previous close of 81.91.

The currency had only just broken out of a narrow trading zone and strengthened past 82 per dollar for the first time in a month last Friday.

Powell, in a speech to lawmakers overnight, said recent strongerthanexpected economic data in the United States suggests that the ultimate level of interest rates could be higher than previously anticipated.

If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.

These were Powell39;s first comments following the higherthanexpected U.S. January jobs and inflation data that had led markets to expect around three more 25bps hikes.

However, after the speech, the probability of a half a percentage point hike at the upcoming March meeting rose to 73 versus 31.4 a day prior, the CME FedWatch tool showed.

Fed funds futures implied U.S. rates peaking above 5.65 in September and holding higher than 5.5 through 2023.

Markets will await Friday39;s U.S. payrolls data and inflation figures due next week.

We are maintaining our forecast of a 25bps hike, but will be ready to change the call next week if…