MUMBAI, March 15 (Reuters) - The Indian rupee is set to open lower on Friday after fresh data showed that U.S. inflation was proving sticky, prompting investors to dial back expectations on Federal Reserve's rate cuts this year.

Non-deliverable forwards indicate rupee will open at 82.94-82.96 to the U.S. dollar compared with its previous close of 82.8175.

"It appears we will have quite a decent up move on USD/INR in the context that how muted the opening usually is," a currency trader at a bank said.

"This return to near-83 will take a lot of people by surprise, and there will be a run to manage positions," the trader added.

Following the higher-than-expected U.S. producer price index (PPI) print, investors have scaled back expectations on Fed rate cuts this year to 75 basis points. This is in-line with what the U.S. central bank's December dot plot had indicated.

U.S. yields jumped, equities declined and the dollar index rose.

The PPI reading came on the back of data that showed U.S. consumer price index (CPI) in February rose more than expected. The January CPI data too had surprised on the upside.

Following the CPI prints in January and February, the PPI data renewed fears of sticky inflation, signalling that cost pressures for firms have picked up, ANZ said in a note.

The U.S. jobless claims data further contributed to expectations that the Fed may hold rates higher for longer. U.S. initial jobless rose 209,000, lower than the 218,000 expected, reinforcing the U.S. labour market's resilience.

The Korean won led losses in broader Asian FX, down nearly 1% while Hong Kong shares led Asian equities lower.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 83.04; onshore one-month forward premium at 7.5 paisa

** Dollar index up at 103.46

** Brent crude futures down 0.2% at $85.3 per barrel

** Ten-year U.S. note yield at 4.29%

** As per NSDL data, foreign investors bought a net $1,759 mln worth of Indian shares on March 13

** NSDL data shows foreign investors bought a net $97.7 mln worth of Indian bonds on March 13 (Reporting by Nimesh Vora; Editing by Varun H K)