Non-deliverable forwards indicate the rupee will open slightly higher to the dollar than its close of 82.9650 in the previous session.
It looks like "it will be a good day" for the rupee, which will see consolidation following "a decent" run the last two days, a forex trader at a bank said.
The rupee's near-term outlook "will have the support" of a budget that will keep "bond inflow coming", he said.
Still, the USD/INR pair has "excellent support" in and around the current level and "we will have to see if there is appetite" to take it lower, the trader added.
The 10-year U.S. Treasury yield dropped to as low as 3.82% on safe haven demand, spurred by renewed concerns over U.S. regional banks and moderating labor costs and higher-than-expected jobless claims.
The two-year U.S. yield briefly fell below 4.15% on Thursday and the dollar index had its worst day in more than a month despite Federal Reserve Chair Jerome Powell indicating that an interest rate cut in March was unlikely.
The cumulative rate cuts priced in for 2024 are now higher than before the Fed meeting that ended mid-week.
The focus now turns to U.S. nonfarm payrolls due later in the day that BofA Securities estimates rose by 175,000 in January, slightly below the 193,000 average over the previous six months.
"If the report comes in line with our expectations, then it will likely mean little change for market pricing for Fed cuts," it said.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 83; onshore one-month forward premium at 7.50 paisa
** Dollar index down at 103.01
** Brent crude futures up 0.7% at $79.3 per barrel
** Ten-year U.S. note yield at 3.89%
** As per NSDL data, foreign investors bought a net $209.5 million worth of Indian shares on Jan. 31
** NSDL data shows foreign investors bought a net $312.1 million worth of Indian bonds on Jan. 31
(Reporting by Nimesh Vora; Editing by Savio D'Souza)
By Nimesh Vora
