The Indian rupee closed marginally weaker on Monday as dollar demand from state-run banks, likely on behalf of importer clients, eroded early gains in the local unit.

The rupee ended at 83.3150 against the dollar, slightly weaker from its close at 83.2950 on Friday.

The dollar index inched higher to 103.4 while most Asian currencies slipped.

U.S. bond yields extended gains on Monday, boosted by a pullback in expectations of a June rate cut after data showed that the U.S. economy created more jobs than expected in March.

The 10-year yield rose to a peak of 4.45%, its highest since late-November, while the 2-year yield climbed to 4.78%.

Odds of the Federal Reserve keeping rates unchanged in June have risen to about 52% from 42% a week earlier, according to CME's FedWatch tool.

While the rupee rose to an intraday high of 83.23, dollar bids from state-run banks ate into those gains, a foreign exchange trader at a private bank said.

Meanwhile, dollar-rupee forward premiums slipped, with the 1-year implied yield down 2 basis points at 1.65%, pressured by higher U.S. yields.

"Relatively small appreciation could be on the cards for the rupee this week," Dilip Parmar, a foreign exchange research analyst at HDFC Securities said.

Crude oil prices and consumer inflation data due in the U.S. and India this week will be key to watch this week, Parmar added.

The U.S. will report consumer inflation data on Wednesday, while India's inflation print is due on Friday. India's rupee and bond markets will be closed on Tuesday.

Brent crude futures fell 0.6% to $90.58 per barrel, on easing geopolitical tensions in the Middle East. (Reporting by Jaspreet Kalra; Editing by Varun H K)