MUMBAI - The Indian rupee was little changed against the dollar on Monday, amid a positive risk mood and concerns over higher U.S. yields, after an agreement was reached to raise the U.S. debt ceiling.

The rupee was at 82.5875 to the U.S. dollar by 10:50 a.m. IST, compared to 82.5750 on Friday. The local currency had managed to reach 82.52 earlier in the session.

It's not a surprise that USD/INR was drawing support near to 82.50, a spot trader said.

The sustainability of rupee recovery from its recent low of near 82.85 "is still questionable," said Anindya Banerjee, head research - FX and interest rates at Kotak Securities.

"Support levels for the short term are around 82.50, then 82.20/25."

Asian equities rose after President Joe Biden on Sunday finalised a budget agreement with House Speaker Kevin McCarthy to suspend the existing debt ceiling until Jan. 1, 2025, and said the deal was ready to move to Congress for a vote.

The debt agreement, alongside more resilient U.S. economic data, pushed up odds of the U.S. Federal Reserve raising interest rates in June to over 60%.

U.S. consumer spending increased more than expected in April, data released on Friday showed. Inflation, meanwhile, picked up.

Near-maturity U.S. yields rose on Friday. Tracking the move higher in U.S. yields, rupee forward premiums extended declines. The 1-year implied yield dropped to 1.80%, the lowest since December 2022.

The 1-year yield is now down almost 50 basis points this month.

(Reporting by Nimesh Vora; Editing by Varun H K)