INDIA RUPEE-Rupee flat before Fed Chair Powell's speech, could drop to 83/USD

By Nimesh Vora MUMBAI, Feb 7 (Reuters) - The Indian rupee was barely changed against the dollar on Tuesday, ahead of Federal Reserve Chair Jerome Powell's speech that will draw extra scrutiny on the back of an upbeat U.S. jobs report. The rupee was at 82.7325 to the U.S. dollar by 09:54 a.m. IST, after tumbling about 1% to 82.7250 on Monday. That was the currency's worst session in more than four months, fuelled by the jobs report on Friday that prompted investors to have a re-look at how high the Fed is likely to raise interest rates. "The unexpected surge in U.S. jobs number has taken markets by surprise," said Srinivas Puni, managing director at QuantArt Market Solutions. "USD/INR is now firmly in a higher range, with a bias towards reaching the 83 level." Powell's speech later in the day will invite scrutiny in the wake of futures pricing a higher Fed terminal rate since the jobs report. Powell, in last week's post-policy meeting press conference, outlined a potential scenario where inflation declines without a material rise in unemployment, ING Bank said. "We'll see how much confidence he has in this scenario (now)." Before the jobs report, traders were pricing in a peak rate of 4.9% and about 50 basis points (bps) of rate cuts this year. Now, the peak rate pricing has climbed to 5.12%, while rate cuts expectations have fallen to about 32 bps. Underscoring the impact of the jobs report, Atlanta Fed President Raphael Bostic said on Monday that the Fed may need to lift borrowing costs higher than previously anticipated. The Fed could consider raising rates by half a percentage point, though that is not his base case, Bostic told Bloomberg News. The rupee forward premiums were marginally lower, with the 1-year implied yield at 2.12% on the back of the hawkish Fed view. (Reporting by Nimesh Vora)