MUMBAI, May 5 (Reuters) - The Indian rupee is expected to resume its uptrend on Monday, supported by a rally in the Chinese yuan and other Asian currencies on optimism around U.S.-China trade talks.

Market attention will remain on the Reserve Bank of India (RBI) after signs of intervention on Friday.

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The 1-month non-deliverable forward indicated that the rupee will open at 84.30-84.35 to the U.S. dollar compared to 84.58 in the previous session.

The rupee had a volatile session on Friday, initially rallying past the 84 mark to touch 83.77, before retreating in the afternoon, likely due to RBI intervention. The central bank is believed to have bought dollars through state-run banks, triggering a reversal in the currency.

Despite the late reversal on Friday, the rupee was still up 1.02% last week.

The currency is likely to see two-way price action on Monday, a trader at a Mumbai-based bank said, adding that the RBI's intervention on Friday could slightly dampen appetite for short dollar positions.

"A further push lower (on dollar/rupee pair) following the opening drop will require actual flows," the trader said.

ASIA FX RALLIES

On Monday, the offshore yuan (CNH) climbed past 7.20 level against the dollar, marking its highest level since November. The yuan had rallied by 1% last week.

The Chinese Commerce Ministry said on Friday that Beijing is considering a U.S. offer to hold discussions on tariffs, suggesting a possible de-escalation in the trade dispute and boosting demand for the yuan.

Riding on the yuan’s rally, other Asian currencies rose to kick off the week on a positive note.

Meanwhile, data released on Friday showed that the U.S. jobs market remains resilient, with the economy adding 177,000 jobs in April, surpassing expectations.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 84.53; onshore one-month forward premium at 18.5 paise

** Dollar index down at 99.64

** Brent crude futures down 3.5% at $59.2 per barrel

** Ten-year U.S. note yield at 4.31%

** As per NSDL data, foreign investors bought a net $20.4 million worth of Indian shares on April 30

** NSDL data shows foreign investors sold a net $125.2 million worth of Indian bonds on April 30

https://www.reuters.com/world/india/trade-talk-hopes-stoke-yuan-rally-boost-rupee-rbi-actions-eyed-2025-05-05/