Non-deliverable forwards indicate the rupee will open at 83.48-83.50 to the U.S. dollar, compared with 83.5025 in the previous session.
Worries over the Indian election results, due on June 4, have prompted foreigners to take out money from equities, pushing the benchmark Nifty 50 index to a three-week low. Foreigners have taken out USD 2 billion from Indian equities in May so far.
They took out more than USD 800 million on Thursday, per provisional data provided by exchanges, amid nervousness that Prime Minister Narendra Modi's party may not chalk up the landslide victory that was forecasted in opinion polls.
The rupee "in a way" has not felt an impact of this election uncertainty, which "you can attribute largely" to how the Reserve Bank of India has managed the currency, an FX trader at a bank said.
"We probably spend more time near 83.50, with the underlying bias on the upside (for USD/INR pair)."
U.S. Treasury yields dropped on Thursday amid initial jobless claims rising more than expected. This follows data that showed that non-farm payrolls rose by the least in six months, tentative signs that the labour market may finally be softening.
While too much should not be read into one round of data, the incoming data will be watched very closely for further evidence that the labour market momentum may be slowing, ANZ Bank said in a note.
Meanwhile, investors are eyeing the key U.S. inflation data due next Wednesday. There is "considerable" uncertainty about where inflation will head in coming months, San Francisco Fed President Mary Daly said on Thursday, while adding she still has faith that price pressures are continuing to cool.
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