Rupee eases a tad ahead of U.S. Fed rate decision

MUMBAI (Reuters) - The rupee trading a touch weaker on Monday as investors cautious ahead of a U.S. Federal Reserve meeting on Tuesday, with the Reserve Bank of India (RBI) likely to block gains from fresh capital flows in the wake of an expected Fed rate cut.

At 12:45 p.m., the rupee at 39.41/42 per dollar, slightly weaker from the previous close. It hit a near-decade high of 39.16 last month.

The Fed is widely expected to lower the key federal funds rate by 25 basis points to 4.25 percent after steady November payrolls data cooled expectations for a more aggressive cut. It has lowered rates twice since mid-September.