MUMBAI, April 29 (Reuters) - The Indian rupee is

expected to be rangebound and, alongside government bonds, will

take it cues from the Federal Reserve's commentary on the future

trajectory of policy rates amid concerns about elevated U.S.

inflation.

The rupee closed flat at 83.34 on Friday but was up

0.1% week-on-week.

The rupee is expected to trade between 83.20 to 83.50 this

week, but volatility may pick up amid "global uncertainty and

month end rebalancing," said Dilip Parmar, a foreign exchange

research analyst at HDFC Securities.

The dollar index rose on Friday but ended the week little

changed. U.S. Treasury yields dipped after March personal

consumption expenditure data (PCE) data came in largely along

expected lines.

A hotter-than-expected core PCE reading for the first

quarter on Thursday had raised concerns that the data would

surprise to the upside.

While the Fed is widely expected to keep rates unchanged at

its April 30-May 1 meeting, it will likely "signal that if

inflation stays high, so will interest rates," ING Bank stated

in a note.

Meanwhile, the 10-year Indian government bond yield

ended at 7.1870% on Friday, down 4 basis points

in the week, after rising an aggregate 16 bps in the first three

weeks.

Traders expect the benchmark bond yield to move in a

7.18%-7.26% range this week, with major focus on movement in

Treasury yields and guidance from the Fed.

Bond yields have been on the rise, tracking the upward

trajectory in U.S. yields and oil prices. Treasury yields have

risen as markets are now expecting just about 31 basis points of

rate cuts in 2024, compared to over 150 bps since at start of

2024.

Oil prices have moved higher, with the benchmark Brent crude

contract around $90 per barrel mark amid supply concerns.

The recent jump in Treasury yields and the rupee

depreciation has also led to major foreign outflows from Indian

government bonds.

Foreign investors have trimmed exposure displaying strong

paying interest, and given unfavourable external cues, interest

in debt might be lukewarm until the index inclusion formally

kicks off in June, said Radhika Rao, executive director and

senior economist at DBS Group Research.

"Markets have also cut back on rate cut expectations amid

heightened geopolitical risks, strong domestic growth momentum

and delays in the U.S. rate cut cycle."

KEY EVENTS:

** India March fiscal deficit data - April 30, Tuesday (3:30

p.m. IST)

** India March infrastructure output data - April 30, Tuesday

(5:30 p.m. IST)

** U.S. April consumer confidence - April 30, Tuesday (7:30 p.m.

IST)

** U.S. April S&P Global manufacturing PMI - May 1, Wednesday

(7:10 p.m. IST)

** U.S. April ISM manufacturing PMI - May 1, Wednesday (7:30

p.m. IST)

** U.S. Federal Reserve policy decision - May 1, Wednesday

(11:30 p.m. IST) ** HSBC India April manufacturing PMI data - May 2, Thursday

(10:30 a.m. IST)

** U.S. initial weekly jobless claims week to April 22 - May 2,

Thursday (6:00 p.m. IST)

** U.S. March international trade GDP - May 2, Thursday (6:00

p.m. IST)

** U.S. March factory orders - May 2, Thursday (7:30 p.m. IST)

** U.S. April non-farm payrolls and unemployment rate - May 3,

Friday (6:00 p.m. IST)

** U.S. April S&P Global services and composite PMI - May 3,

Friday (7:15 p.m. IST)

** U.S. April ISM non-manufacturing PMI - May 3, Friday (7:30

p.m. IST)