MUMBAI: The Indian rupee is expected to open lower on Monday, after jobs data indicated that the US labour market remained robust, reducing the likelihood of Federal Reserve rate cuts later this year.

Non-deliverable forwards indicate rupee will decline to around 83.48-83.50 from 83.3725 in the previous session.

The rupee last week was choppy amid India’s election results, which spurred foreigners to sell local equities and likely dollar sales by the Reserve Bank of India.

“I would think this repeated intervention by the RBI near 83.50-83.55 and the expectation of that will mean that the higher opening (on dollar/rupee) will not have much carry through. At least initially,” a currency trader at a bank said.

The dollar index advanced on Friday, and the 10-year US Treasury yields rose by the most in two months after data showed job growth accelerated more than expected in May.

The probability that the Fed will cut rates at the September meeting dropped.

Futures are now pricing in just 35 basis points of total rate cuts this year, down from nearly 50 bps before the data.

US wage inflation climbed in May, with average hourly earnings rising 0.4% after a 0.2% increase in April, providing one more reason to pare Fed rate cut bets.

Indian rupee ends moderately higher

“In terms of what this means for the Fed - well it confirms that the Fed will be pushing back rate cut projections from 3 cuts this year to most probably 2 cuts this year we can’t rule them out saying just one for this year,” ING Bank said in a note.

Asian currencies were down on the day with the Korean won, the Thai baht and the Indonesian rupee slipping between 0.5% to 0.8%.

Asian equities dipped alongside US equity futures.