MUMBAI, May 30 (Reuters) - The Indian rupee is expected to open higher on Tuesday, in the wake of the dollar's decline against its major peers and Asian currencies.

Non-deliverable forwards indicate rupee will open at around 82.55 to the U.S. dollar compared with 82.6250 in the previous session.

The local currency was in a 82.51-82.68 range on Monday.

"With volatility low, small support and resistance levels matter," a spot trader said.

"In that context, 82.50 looks like the near-term support (for USD/INR pair), and we should see bids around that."

In the current month, the rupee is down almost 1% to the dollar, despite the sizeable pick in portfolio flows, especially on the equity side.

The dollar index was down and most Asian currencies managed to inch up. The pullback in U.S. yields alongside the positive risk mood impacted demand for the dollar.

U.S. Treasuries, resuming trade after Monday's holiday, rallied in Asia on Tuesday with bond traders welcoming a deal to suspend Washington's borrowing limit and avert a debt default, should it pass Congress.

The 2-year U.S. yield was down to 4.58%, pulling back from two-and-a-half month highs.

The downside on the dollar and near-maturity U.S. yields looks capped, considering increasing likelihood of another U.S. Federal Reserve rate hike, according to analysts.

The odds of a 25 basis points rate hike by the U.S. central bank next week has climbed to more than 60% on back of the resilient U.S. data alongside an agreement on raising the debt ceiling.

Ahead of the Fed's June 13-14 meeting, there is the U.S. jobs report due this Friday.

If Friday's jobs numbers "are hot," we have to accept a June interest rate hike would look more likely than not, ING Bank said in a note.

KEY INDICATORS: ** One-month non-deliverable rupee forward at 82.64; onshore one-month forward premium at 8 paisa ** USD/INR NSE June futures settled on Monday at 82.7150 ** USD/INR June forward premium at 8.0 paisa ** Dollar index down at 104.2 ** Brent crude futures up 0.3% at $77.3 per barrel ** Ten-year U.S. note yield at 3.75% ** SGX Nifty nearest-month futures up 0.1% at 18,707 ** As per NSDL data, foreign investors bought a net $216.4 mln worth of Indian shares on May 26

** NSDL data shows foreign investors bought a net $49.6 mln worth of Indian bonds on May 26 (Reporting by Nimesh Vora; Editing by Varun H K)