MUMBAI, May 3 (Reuters) - The Indian rupee rose on Friday aided by broad-based offers to sell dollars by local and foreign banks and a dip in U.S. bond yields.
The rupee was at 83.3450 against the U.S. dollar as of 10:25 a.m. IST, up 0.1% from its previous close at 83.47.
Most Asian currencies rose, with the Korean won up 0.8% and leading gains. The offshore Chinese yuan rose to a peak of 7.18 to the dollar, its highest since mid-March.
The rupee "should trade with an upward bias but gains could be limited by dollar demand from local oil companies," a foreign exchange trader at a state-run bank said.
Strong offers from both local and foreign banks helped the rupee rise in early trading, the trader added.
Dollar demand from importers and foreign banks had pressured the rupee to weaken slightly on Thursday even as most other Asian currencies gained, traders said.
The dollar index was at 105.2 after declining 0.3% on Thursday, adding to its losses following the Federal Reserve's policy decision on Wednesday and less hawkish than expected remarks from Chair Jerome Powell.
U.S. bond yields dipped on Thursday with the 2-year Treasury yield down about 6 basis points at 4.88%, while the 10-year yield also edged lower.
The factors all broadly support the rupee but the currency's gains are expected to be capped near 83.20 in the near term, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
Investors now await the U.S. non-farm payrolls report for April, due later in the day, for cues on strength in the U.S. labor market which will influence expectations of when the Fed may begin cutting rates. (Reporting by Jaspreet Kalra; Editing by Varun H K)
