MUMBAI (Reuters) - The Indian rupee is expected to be rangebound and, alongside government bonds, will take it cues from the Federal Reserve's commentary on the future trajectory of policy rates amid concerns about elevated U.S. inflation.

The rupee closed flat at 83.34 on Friday but was up 0.1% week-on-week.

The rupee is expected to trade between 83.20 to 83.50 this week, but volatility may pick up amid "global uncertainty and month end rebalancing," said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.

The dollar index rose on Friday but ended the week little changed. U.S. Treasury yields dipped after March personal consumption expenditure data (PCE) data came in largely along expected lines.

A hotter-than-expected core PCE reading for the first quarter on Thursday had raised concerns that the data would surprise to the upside.

While the Fed is widely expected to keep rates unchanged at its April 30-May 1 meeting, it will likely "signal that if inflation stays high, so will interest rates," ING Bank stated in a note.

Meanwhile, the 10-year Indian government bond yield ended at 7.1870% on Friday, down 4 basis points in the week, after rising an aggregate 16 bps in the first three weeks.

Traders expect the benchmark bond yield to move in a 7.18%-7.26% range this week, with major focus on movement in Treasury yields and guidance from the Fed.

Bond yields have been on the rise, tracking the upward trajectory in U.S. yields and oil prices. Treasury yields have risen as markets are now expecting just about 31 basis points of rate cuts in 2024, compared to over 150 bps since at start of 2024.

Oil prices have moved higher, with the benchmark Brent crude contract around $90 per barrel mark amid supply concerns.

The recent jump in Treasury yields and the rupee depreciation has also led to major foreign outflows from Indian government bonds.

Foreign investors have trimmed exposure displaying strong paying interest, and given unfavourable external cues, interest in debt might be lukewarm until the index inclusion formally kicks off in June, said Radhika Rao, executive director and senior economist at DBS Group Research.

"Markets have also cut back on rate cut expectations amid heightened geopolitical risks, strong domestic growth momentum and delays in the U.S. rate cut cycle."

KEY EVENTS:** India March fiscal deficit data - April 30, Tuesday (3:30 p.m. IST)

** India March infrastructure output data - April 30, Tuesday (5:30 p.m. IST)** U.S. April consumer confidence - April 30, Tuesday (7:30 p.m. IST)

** U.S. April S&P Global manufacturing PMI - May 1, Wednesday (7:10 p.m. IST)

** U.S. April ISM manufacturing PMI - May 1, Wednesday (7:30 p.m. IST)** U.S. Federal Reserve policy decision - May 1, Wednesday (11:30 p.m. IST) (Reuters poll: No change expected)** HSBC India April manufacturing PMI data - May 2, Thursday (10:30 a.m. IST) ** U.S. initial weekly jobless claims week to April 22 - May 2, Thursday (6:00 p.m. IST) ** U.S. March international trade GDP - May 2, Thursday (6:00 p.m. IST) ** U.S. March factory orders - May 2, Thursday (7:30 p.m. IST) ** U.S. April non-farm payrolls and unemployment rate - May 3, Friday (6:00 p.m. IST) ** U.S. April S&P Global services and composite PMI - May 3, Friday (7:15 p.m. IST) ** U.S. April ISM non-manufacturing PMI - May 3, Friday (7:30 p.m. IST)

(Reporting by Dharamraj Dhutia and Jaspreet Kalra; Editing by Sonia Cheema)

By Dharamraj Dhutia and Jaspreet Kalra