The Rupee opened weaker on Friday following hawkish comments from Federal Reserve officials, while a continued moderation in the trade deficit and expectations of central bank support are expected to cap losses. The rupee will have to contend with a dollar supported by data pointing to a resilient U.S. labour market and hawkish comments from Fed policymakers. Fed officials struck a broadly hawkish, inflation-first tone on Thursday, with most signalling that any rate cuts would be conditional on sustained progress towards the 2% inflation target. U.S. Treasury yields rose on Thursday, while interest rate futures show markets are now pricing in the first Fed rate cut only in June 2026. The dollar index rose to 99.30. Meanwhile, India's merchandise trade deficit for December stood at $25.04 billion, below a Reuters poll estimate of $27 billion and only slightly wider than November’s $24.53 billion, data released on Thursday showed. Economists at HSBC noted that the data pointed to a drop in gold imports and a normalisation in the trade deficit after October’s more than $40 billion shock. The dollar was poised for a third weekly gain on Friday after positive U.S. economic data lowered expectations for rate cuts by the Federal Reserve anytime soon. The greenback rose overnight on a surprise decline in weekly jobless figures and was steady in Asian morning trade. The yen remained at levels that risked intervention in currency markets by Japan to defend its currency. The dollar index , which measures the greenback against a basket of currencies, was little changed at 99.36 and poised for a 0.2% advance this week. The euro was steady at $1.1607. The yen strengthened 0.05% against the greenback to 158.58 per dollar, but is set to fall about 0.5% this week. Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 198,000 for the week ended January 10, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims for the latest week. The Japanese currency has fallen on expectations that Prime Minister Sanae Takaichi may have more leeway to introduce more fiscally expansionist policies pending a snap election expected early next month. Warnings from Japanese policymakers that they stand ready to act against one-way movements in foreign exchange markets have given the yen brief boosts. The yen is getting little help from expectations of rate hikes by the Bank of Japan. The central bank will likely wait until July before raising its key interest rate again, economists said in a Reuters poll released on Thursday. The Australian dollar was little changed against the greenback, trading at $0.6699. New Zealand's kiwi strengthened 0.05% to $0.5745. Oil prices were flat on Friday with both Brent and U.S. West Texas Intermediate moving only a few cents from their closing prices after the likelihood of a U.S. strike on Iran receded. Brent was down 3 cents, or 0.05%, to $63.73 per barrel, while U.S. West Texas Intermediate was up 4 cents, or 0.07%, to $59.22 per barrel as of 0223 GMT.......