The Indian rupee fell to a two-month low and the Indonesian rupiah to a new record low as the US dollar continued to rise and hit a 12-year high amid speculation that the US may hike interest rates sooner than earlier expected.

USD/INR rose to 62.94, its highest since 8 January, from the previous close of 62.88, before easing to 62.69, in line with mild gains in stocks and recovery in some Asian units. The BSE Sensex was trading 0.12% higher.

USD/IDR rallied to 13,231, a new multi-year high, from Tuesday's close of 13,138. The rupiah has been trending lower for almost a year now as the pair turned northward from a five-month low of 11,280 in March 2014.

The rupee has been on a downward track since late January and has fallen more than 2% so far this month.

The Indian unit has been keeping the southward bias for quite a while over the long term and the USD/INR has never fallen below the 14-period moving average on the monthly chart since mid-2011.

After the US jobs data surprise on last Friday and Dallas Fed president Richard Fisher's hawkish comments on Monday, the US dollar rallied across the board hitting new multi-year highs, pushes currencies like the rupee further lower.

"The Fed rate hike concerns are weakening the rupee now through a strong dollar. Fear of dollar becoming tighter is prompting importers to shell out more rupees for their needs," said a trader at a state-run bank based in Chennai.

Traders said the rupee may fall as much as 64/dollar in the coming days but fundamental strength of the Indian economy would prevent sharper slides immediately.

"The RBI has been buying dollar when the USD/INR fell below 62 recently but that doesn't mean they would allow sharper depreciation so quickly through levels like 64," the trader added.

Charts show that a break above 63.0 will open doors to 63.60 first and then 64.0, the December 2014 high, beyond which the pair would match levels of September 2013.

The USD index has risen to a 12-year high of 99.01 on Wednesday, and at its 12-year low, the euro is now a little more than half a cent from parity versus the US dollar.