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The Indian rupee weakened on Tuesday, tracking a drop in Asian peers, amid tepid risk appetite as attention turns to key U.S. economic data due this week.

The rupee was at 83.33 against the U.S. dollar as of 10:10 a.m. IST, down 0.1% from its previous close at 83.2075.

The Korean won and Thai baht led losses among Asian currencies and, declining 1% and 0.3%, respectively. The dollar index rose to 101.56.

The rupee's decline was "largely driven by global cues," a foreign exchange trader at a state-run bank said, adding that the losses are likely to be contained as "good offers (to sell dollars) are present at these levels."

The week is peppered with economic data releases in the United States, including the ISM manufacturing PMI on Wednesday, initial jobless claims on Thursday, and unemployment data on Friday.

Investors are also eyeing the minutes of the U.S. Federal Reserve's December policy meeting to be released on Thursday, for cues on policymakers' thinking about the interest rate trajectory.

Mounting expectations of rate cuts have maintained pressure on the dollar, which had fallen to its lowest in 5 months in the previous week.

The dollar-rupee pair is expected to "remain in the range with 83.40 being a near term top ... as RBI continues to keep a strong presence," in the market, Anil Bhansali, head of treasury at Finrex Treasury Advisors said.

While inflows into India could be muted at the start of the new year, traders expect to see a pick up from the second week, which should aid the rupee.

Overseas investors net bought $28.7 billion worth of Indian equities and bonds in 2023, of which $10.1 billion was in December alone.