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The Indian rupee rose on Friday after disappointing U.S. private payrolls data fuelled expectations of a weaker jobs report, prompting traders to avoid the U.S. dollar.

The rupee was at 83.9350 to the U.S. dollar at 9:30 a.m. IST, up from 83.9825 in the previous session.

U.S. private employers hired the fewest number of workers in three and a half years in August and data for the prior month was revised lower, suggesting that the labour market was cooling down.

The private payrolls data comes before the more important non-farm payroll print due later in the day.

With private payroll coming in below estimates, concerns "about a weak non-farm payroll (NFP) report today are keeping markets jittery", Srinivas Puni, managing director at FX advisory firm QuantArt Market Solutions, said.

The NFP data is expected to sway the Federal Reserve's decision on whether to cut rates by 25 basis points or 50 bps at their upcoming meeting. Right now, it is nearly a toss-up between the two.

"The Fed outcome related to the quantum of the cut and the ensuing language are now very critical for the medium-term USD outlook," Puni said.

Economists polled by Reuters expected 160,000 jobs additions and an unemployment rate at 4.2%.

If job growth exceeds what is expected and the unemployment rate falls to or below consensus, it is likely to be a negative for those hoping for aggressive rate cuts, Saxo Bank said in a note.

The dollar was weaker across the board before the data. The dollar index slipped below 101 and Asian currencies were higher by 0.1% to 0.4%.