Indian rupee inches higher, forward premiums slip as Fed rate cut bets recede

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The currency should trade with a slight upward bias, the trader added.

A moderation in crude oil prices on easing tensions in the Middle East is also likely to assist the rupee, traders said. Brent crude oil futures were last quoted down 1.6% at $89.70 per barrel.

The dollar index was little changed at 104.3 while Asian currencies were mixed.

Treasury yields rose after data showed the U.S. economy created more jobs than expected in March, prompting a pullback in odds of a rate cut at the Fed's June meeting.

The 10-year U.S. Treasury yield was higher in Asia at 4.41% after rising 7 basis points (bps) on Friday.

Chances of a June rate cut have declined to below 50%, down from about 57% a week earlier, according to CME's FedWatch tool.

Meanwhile, dollar-rupee forward premiums declined, with the 1-year implied yield down 2 bps at 1.65%, pressured by the rise in U.S. bond yields.

The rupee is expected to remain in a 83.20-83.40 range on Monday, Anil Bhansali, head of treasury at Finrex Treasury Advisors said.

India's rupee and bond markets will be closed Tuesday.

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