The Indian rupee was flat on Friday as market participants reckoned that U.S. jobs data due later in the day is likely to be the bigger cue for the unit as investors have largely priced in the central bank's expected status quo on policy rates.
The rupee was at 83.34 against the U.S. dollar as of 09:45 a.m. IST, barely changed from its close at 83.3525 in the previous session.
The dollar index was slight lower at 103.59 while Asian currencies were largely range bound.
The rupee is largely "expected to trade sideways ahead of the Reserve Bank of India's monetary policy," said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
The RBI will deliver its monetary policy decision at 10 a.m. IST and is widely expected to keep rates unchanged.
The policy decision "should largely be a non-event," for the rupee as no surprises are expected, a foreign exchange trader at a private bank said.
India's overnight index swap market hinted that the RBI is unlikely to rush to cut interest rates even if the U.S. Federal Reserve starts bringing down rates early next year.
Fed futures are currently pricing in a 55% chance of a rate cut as soon as March next year.
The 10-year U.S. Treasury yield inched up to 4.15% in Asia after having fallen to its lowest level in three months overnight.
While data in the U.S. on Thursday showed that the number of Americans filing for initial jobless claims increased slightly less than expected, investors will closely watch the non-farm payrolls data due later in the day.
Reuters' polls estimate that the U.S. unemployment rate remained unchanged at 3.9% in November, while non-farm payrolls are expected to have risen to 180,000 up from 150,000 in October. (Reporting by Jaspreet Kalra; Editing by Eileen Soreng)