The Indian rupee slipped to around 94.2 per dollar, hitting a four-week low as external pressures weighed on sentiment. The currency has fallen for five straight sessions, down about 1.3% this week and pulling back from its recent high near 92.5. Traders said the Reserve Bank of India has been selling dollars intermittently to limit volatility, aiming to slow the decline rather than defend a fixed level. However, strong dollar demand continues to keep the USD/INR pair elevated, limiting any recovery. Oil prices have added to the strain, with Brent crude climbing toward $106 per barrel and briefly touching $107, the highest in two weeks, as geopolitical tensions in the Middle East fuel supply concerns. Foreign portfolio outflows have further weighed on the currency. Equity withdrawals have remained strong, with cumulative outflows earlier this month briefly surpassing last year’s record annual exit of $18.79 billion.
Gold prices attempted a recovery on Friday, climbing back above $4,700 per ounce as cautious optimism emerged over potential progress in US-Iran peace negotiations. According to Al-Jazeera, Iranian Foreign Minister Abbas Araghchi is scheduled to arrive in Islamabad on Friday evening, citing Pakistani government sources. These sources indicated a "high likelihood of a breakthrough" in the ongoing talks between the United States and Iran. The visit follows recent Iranian-Pakistani talks on a ceasefire, though uncertainties remain. US President Donald Trump reiterated he wants a "great deal" but is "not in a rush." Still, gold faces an over 2% weekly decline as peace negotiations have shown limited progress so far, and the continued closure of the Strait of Hormuz has driven energy prices higher. Rising inflation risks and potential rate hikes continue to weigh on non-yielding bullion.
