MUMBAI, July 15 (Reuters) - The Indian rupee and government bonds may face some pressure early this week amid demand for safe haven assets after former U.S. President Donald Trump was shot in the ear in an attempted assassination during a campaign rally on Saturday.

The rupee closed at 83.5350 against the U.S. dollar on Friday, down slightly week-on-week even though most of its Asian peers gained on rising expectations that the Federal Reserve will begin easing policy rates from September.

Before the shooting, markets had reacted to the prospect of a Trump presidency by pushing the dollar higher and positioning for a steeper U.S. Treasury yield curve, and the shooting could bolster those trades.

While a stronger dollar could pressure the rupee, the Reserve Bank of India is unlikely to allow a sharp depreciation, a foreign exchange trader at a state-run bank said. Traders expect the currency to hover between 83.35 and 83.65 this week.

Investors will also keep an eye on remarks from Fed Chair Jerome Powell and other policymakers, alongside U.S. retail sales data, for cues on the future path of policy rates.

Last week, a lower-than-expected inflation reading for June increased bets that the Fed would start cutting rates in two months.

The rupee's largely rangebound price action is likely to persist until India's federal budget announcement on July 23, said Sajal Gupta, executive director and head of forex and commodities at Nuvama Institutional.

Meanwhile, the 10-year government bond yield ended at 6.9882% on Friday, nearly flat for the week and after a two basis point fall in the prior week.

Traders expect the benchmark yield to move in the 6.96%-7.02% range this week.

Bond yields have barely budged over the last two weeks due to lower-than-expected foreign inflows since India's debt got included in JPMorgan's emerging market debt index on June 28.

Foreign investors have bought about $2 billion worth of Indian debt and equities so far in July, according to stock depository data.

The next major market trigger is expected to be the national budget on July 23.

Nomura expects the government to lower its fiscal deficit target for the current year to 5% of gross domestic product, from the 5.1% target set in the interim budget in February.

"Despite the possible cut to the fiscal deficit, we do not foresee a decrease in market borrowing. Gross borrowing is likely to be maintained at 14.13 trillion rupees ($169.23 billion), but we expect a reduction in the T-bill calendar," economists Sonal Varma and Aurodeep Nandi said in a note.

KEY EVENTS:

** India June WPI inflation data - July 15, Monday (12:00 p.m. IST)(Reuters poll: 3.50%)

** U.S. June import prices - July 16, Tuesday (12:00 p.m. IST)

** U.S. June retail sales - July 16, Tuesday (12:00 p.m. IST)

** U.S. June housing starts - July 17, Wednesday (6:00 p.m. IST)

** U.S. June industrial production - July 17, Wednesday (6:45 p.m. IST)

** European Central Bank monetary policy decision - July 18, Thursday (5:45 p.m. IST) (Reuters poll: no change)

** U.S. initial weekly jobless claims for week to July 8 - July 18, Thursday (6:00 p.m. IST)

** U.S. July Philly Fed Business Index - July 18, Thursday (6:00 p.m. IST) ($1 = 83.4950 Indian rupees) (Reporting by Dharamraj Dhutia and Jaspreet Kalra; Editing by Savio D'Souza)