MUMBAI, Dec 9 Reuters The Indian rupee closed slightly weaker on Monday, weighed down by a decline in its Asian peers with analysts expecting the local currency to continue facing headwinds amid persistent strength in the U.S. dollar.

The rupee ended at 84.73 against the U.S. dollar, down from its close of 84.6875 in the previous session.

While the rupee touched a low of 84.7350 during the session, mild dollar sales from staterun banks helped avoid further losses, traders said.

We expect INR to trade at current levels with a depreciating bias. The Reserve Bank of India39;s recent measures to boost foreign inflows and a rangebound CAD current account deficit should lend support over the medium term, economists at Bank of Baroda said in a note.

The dollar index was higher at 105.9 while most Asian currencies weakened. The Korean won declined 1 on the day to lead losses amid deepening political turmoil in the country.

While U.S. labour market data released on Friday drove U.S. bond yields lower on heightened expectations of a Federal Reserve rate cut later this month, it did little to dent the dollar39;s stride.

Expectations that the incoming Trump administration39;s policies may reignite inflation and slow future rate cuts by the Fed have helped keep the dollar well bid.

There seems little reason to reduce long dollar positions right now and after two weeks of consolidation, we see it as more likely that the dollar will resume its bull trend, ING Bank said in a…