CURRENCY OVERVIEW

 The Rupee closed weaker  weaker in a volatile session on Friday as investors stayed cautious amid fears of an escalation in tensions with Pakistan after a militant attack in Kashmir earlier this week. The local unit dropped about 0.1% week-on-week.  Indian stock markets dropped on Friday, significantly underperforming other Asian equity indexes on growing fears of further tensions with neighbouring Pakistan. The nuclear-armed nations have unleashed a raft of measure against each other, with India keeping a critical river water-sharing treaty in abeyance and Pakistan closing its airspace to Indian airlines, among other steps. There have been calls for and fears that India could conduct a military strike in Pakistani territory as it did in 2019. The dollar headed for its first weekly gain since mid-March on Friday after China granted  for U.S. imports, raising hopes that the trade war between the world's two largest economies may be closer to abating. The U.S. currency has been whipsawed this week by conflicting signs for a thaw in the fraught relations between Washington and Beijing. By Friday, a number of businesses that had been notified of the changes said China had granted some exemptions from its 125% tariffs on U.S. imports and was asking companies to identify the goods that could be eligible. The dollar rose against a basket of currencies , up around 0.2% on the day and set for a modest weekly gain, its first since the middle of March.  However, even with some exemptions in place, there was still not enough clarity over the bigger picture to fully reverse some of the investor flows out of the dollar, which has dropped 4% since Trump first announced his "Liberation Day" tariffs on April 2. The dollar was up 0.82% on the day against the yen at 143.775 and was up 0.42% against the Swiss franc at 0.82985 francs. The euro fell 0.24% to $1.1363, while the pound declined 0.12% to $1.332, even after surprisingly strong UK retail sales figures. Oil prices edged higher on Friday but were set for a weekly decline, under pressure from market expectations of oversupply and uncertainty around tariff talks between the U.S. and China. Brent crude futures were up 45 cents to $67.00 a barrel at 1:12 p.m. EDT (1712 GMT), taking losses to 1.5% over the week. U.S. West Texas Intermediate crude gained 45 cents to $63.24 a barrel, headed for a weekly decline of 2.2%.