MUMBAI, April 8 (Reuters) - The Indian rupee will likely hold an upward bias on Monday despite a report indicating a robust U.S. labour market that spurred a surge in U.S. Treasury yields.

Non-deliverable forwards indicate rupee will open slightly higher-to-flat to the U.S. dollar compared with 83.2950 in the previous session.

The local currency managed a turnaround on Friday, after having slipped to a record low of 83.4550 a day before that. The expectations that the central bank will not allow a big slide in the rupee alongside an abatement in dollar demand related to currency futures helped the rupee recover, traders said.

"What happened on Friday will obviously have an impact on how we open today," an fx trader at a bank said, adding that they did not see the rupee dropping much.

"Yes, US yields are higher.. however, it's not like Asian currencies have fallen much and then equities are mostly alright."

The 2-year U.S. yield climbed on Friday and rose more in Asia hours after data showed the world's largest economy created more jobs than expected last month, prompting investors to dial back odds of a rate cut at the Federal Reserve's June meeting.

The probability of a June rate cut is now down to less than 50%, with investors pricing in just 60 basis points of rate cuts this year, less than the 75 bps the Fed's dot plot indicates.

Interest rate cut expectations have unsurprisingly receded following the jobs data, James Knightley, chief international economist at ING Bank, said in a note. "The prospect of a June rate cut now looks slim."

The focus now turns to the U.S. inflation data due Wednesday.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 83.36

** Dollar index at 104.28

** Brent crude futures drops 1.5% to $89.80

** Ten-year U.S. note yield climbs to 4.42%

** As per NSDL data, foreign investors sold $117 million of Indian shares on April 4

** NSDL data shows foreign investors sold $102 million of Indian bonds on April 4

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https://www.reuters.com/markets/currencies/rupee-bias-seen-upside-despite-jump-us-treasury-yields-2024-04-08/