MUMBAI, April 2 (Reuters) - The Indian rupee gained on Tuesday, ducking the weakness in its Asian peers and instead finding support from exporters' mild dollar sales and expectations of the central bank's intervention.
The rupee was at 83.3625 against the U.S. dollar as of 10:05 a.m. IST, mildly stronger than its close of 83.40 on Thursday. The markets were closed on Friday and Monday.
The rupee is likely to be range-bound, with the Reserve Bank of India "expected to keep a tab on rupee weakness by selling dollars," said Anil Bhansali, head of treasury at Finrex treasury advisors.
The dollar index was at 105.06, close to its highest since mid-November, after having risen over 0.4% on Monday due to stronger-than-expected U.S. ISM manufacturing PMI data.
Asian currencies declined, led by the Malaysian ringgit's 0.4% drop. The Chinese yuan also weakened to a four-and-a-half-month low, prompting the country's state-run banks to sell dollars.
The dollar-rupee pair is likely to trade with a "buy on dips" bias and gains are likely to be limited near 83.40-42, a foreign exchange trader at a private bank said.
Mild dollar sales by exporters also aided the rupee in early trading, the trader added.
Meanwhile, dollar-rupee forward premiums edged lower, with the 1-year implied yield down 1 basis point at 1.62%, pressured by an uptick in U.S. bond yields as investors pared expectations of a Federal Reserve rate cut in June.
The 1-year U.S. treasury yield inched up to 5.09% in Asia trading hours after having risen 5 basis points on Monday.
Investors await remarks from multiple Fed officials slated to speak through the week, including Fed Chair Powell on Wednesday, for further cues on policymakers' thinking about the trajectory of policy rates. (Reporting by Jaspreet Kalra; Editing by Savio D'Souza)
