By Nimesh Vora

MUMBAI, May 21 (Reuters) - The Indian rupee is set to rise at Thursday's open, helped by a pullback in oil prices that dragged down U.S. Treasury yields, a pressure point on the currency in recent sessions.

The rupee INR=IN is expected to open in 96.66-96.70 range, per traders, having settled at 96.82 on Wednesday. The currency is on a nine-day losing streak, shaving off 2.5% of its value and repeatedly making new lows against the U.S. dollar.

Based on recent price action, any opening dip in dollar/rupee is likely to be bought into, an FX salesperson at a bank said, echoing bankers who have noted that the smallest of dips are drawing importers.

Brent crude dropped 5.6% on Wednesday and was last hovering near the $105 a barrel level. Investors continued to monitor headlines for signs of progress in U.S. negotiations with Iran to resolve the conflict.

U.S. President Donald Trump said on Wednesday that negotiations were in the final stages while warning of further attacks unless a deal is made.

The selloff in U.S. Treasuries on concerns that a higher inflation outlook could lead to a Federal Reserve rate hike, halted, following the drop in oil prices.

The 10-year yield fell nearly 10 basis points on Wednesday to slip below the 4.60% level.

Still, analysts cautioned that yields could rise further, adding pressure on the rupee and other emerging market currencies, with rates in Europe, the U.K. and Japan tracking the U.S. move.

"Hard to shake off the bearish dynamic without a solution in the Middle East," ING Bank said in a note.

Meanwhile, the Reserve Bank of India on Wednesday announced a dollar/rupee buy-sell swap auction worth $5 billion with a tenor of three years, scheduled for May 26, which bankers said will pull down forward premiums.