INDIA RUPEE Rupee knocked down by surging oil following output cuts

MUMBAI, April 3 (Reuters) - The Indian rupee fell against the U.S. dollar on Monday, as an unexpected output cut by oil producing club OPEC+ sent crude prices higher and weighed on Asian currencies.

The rupee ended the day at 82.3325 per dollar, as compared to its previous close of 82.1650.

The announcement from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to slash output by a further 1.16 million barrels per day sent Brent crude futures over 5% higher.

The Chinese yuan and the South Korean won fell around 0.3% and 0.7%, respectively, as most developing Asian countries are oil importers.

Analysts expected the move could lift the price of oil by up to $10 a barrel, which could drive global inflation higher.

"The cut in production along with higher demand in the second-half, once China recovery gains momentum, could increase oil prices in the coming months" and put pressure on the rupee, HDFC Bank economists said in a note.

The currency is expected to trade between 82 and 82.60 per dollar, awaiting the Reserve Bank of India (RBI) meeting this Thursday, they added.

The RBI is likely to raise rates by 25 basis points (bps) and pause for the rest of the year, but still maintain its hawkish stance, according to a Reuters poll.

The dollar index gained initially on renewed fears over inflation, as traders wagered the U.S. Federal Reserve may need to increase interest rates at its next meeting, but was trading slightly lower at 102.560 by 3:30 p.m. IST.

Bets of a 25 bps hike at the Fed's May meeting rose further to 66%, after having been around 50% for most of last week.

U.S. March non-farm payroll report, due on Friday, would be crucial to gauge the Fed's policy path.

India's financial markets are shut on Tuesday for a public holiday.