MUMBAI, Feb 5 (Reuters) - The Indian rupee weakened on Monday pressured by a slump in most Asian currencies after stronger-than-expected U.S. economic data prompted investors to pare bets on early rate cuts by the Federal Reserve and drove Treasury yields higher.
The rupee was at 83.0250 against the U.S. dollar as of 10:25 a.m. IST, weaker by 0.13%, compared to its close at 82.9175 in the previous session.
The 10-year U.S. Treasury yield inched up to 4.06% in Asia hours after surging 17 basis points on Friday as data showed U.S. non-farm payrolls rose by 353,000 in January, well above the consensus expectation of 180,000.
The dollar index was at 104.07, hovering close to its highest level since mid-December while most Asian currencies fell. The Korean won led losses in Asia, dropping 0.9%.
The dollar-rupee pair was "well-bid," in early trading on Monday and the rupee is expected to drift lower through the session, a foreign exchange trader at a private bank said.
The robust U.S. jobs data and comments from Fed Chair Jerome Powell also led to further moderation in investors' expectations of a March rate cut, which have fallen to 17%, down from 46% as of Jan. 26, according to CME's FedWatch tool.
Technical analysis points to a strong resistance level for the dollar-rupee pair at 83.25 to 83.30, Amit Pabari, managing director at FX advisory firm CR Forex said. "Any upward movement within this range should be viewed as an opportunity to sell."
Meanwhile, rupee forward premiums fell with the one-year implied yield falling 5 bps to 1.77%, pressured by the rise in U.S. bond yields.
Investors now await the outcome of the Reserve Bank of India's monetary policy meeting due on Thursday. (Reporting by Jaspreet Kalra; Editing by Eileen Soreng)
