The Rupee opened flat on Friday, with traders settling into a wait-and-see mode as they assess the New Year flows after a year dominated by central bank intervention and underlying dollar demand. The rupee was the worst-performing Asian currency in 2025, and volumes are expected to remain thin at the onset of the New Year, with traders assessing the pace and mix of dollar flows. Looking ahead to the first quarter of 2026, traders said the rupee’s direction will hinge primarily on news flows around a potential U.S.–India trade agreement and the behaviour of foreign portfolio investors, both of which could alter the flow that weighed on the currency last year. Moves in the dollar index and performance of Asian peers are expected to play a secondary role. Most Asian currencies began the New Year on a weak footing, with the Chinese yuan an exception. The yuan outperformed the rupee decisively last year, rising roughly 5% while the Indian currency shed about the same amount. The U.S. dollar made a feeble start to 2026 on Friday after struggling against most currencies last year, while the yen steadied near 10-month lows as traders awaited economic data this month to gauge the path of interest rates. A dwindling interest rate difference between the U.S. and other economies has cast a shadow over the currency market, resulting in most currencies gaining sharply against the dollar in 2025, with the yen an exception. The euro was steady at $1.1752 in early Asian hours after surging 13.5% last year, while sterling last bought $1.3474 following a 7.7% increase in 2025. Both currencies clocked their steepest annual rises since 2017. The yen was last at 156.74 per U.S. dollar after rising less than 1% against the greenback in 2025 and hovering close to the 10-month low of 157.90 it touched in November that sparked worries of intervention from Tokyo. Severe verbal warnings from authorities in Tokyo through December managed to push the yen away from the intervention zone but those fears still linger. With markets in Japan and China closed, volumes are likely to be thin and moves muted during Asian hours. The dollar index , which measures the U.S. currency against six other units, was at 98.243 after registering a 9.4% decline in 2025, its biggest drop in eight years as interest rate cuts, erratic trade policies and worries about the Federal Reserve's independence under the Trump administration weighed. The Australian and New Zealand dollars both started the new year on the front foot. The Aussie was 0.1% higher at $0.66805 after a nearly 8% rise in 2025, its strongest yearly performance since 2020. Oil prices edged up on the first day of trade in 2026 after last year posting their biggest annual loss since 2020, as Ukrainian drones targeted Russian oil facilities and a U.S. blockade pressured Venezuela's exports. Brent crude futures climbed 14 cents on Friday to $60.99 a barrel by 0146 GMT, while U.S. West Texas Intermediate crude was at $57.56 a barrel, up 14 cents.......