The Rupee closed stronger on Friday, as a key U.S. inflation data came in line with expectations and reinforced bets that the Federal Reserve will cut interest rates next week. Friday’s move ended a volatile week, during which the rupee stayed largely below the 88-mark, weighed down by persistent portfolio outflows and U.S. tariff-related uncertainties. The local unit has been under steady pressure since the U.S. imposed additional punitive tariffs on Indian imports last month over the purchase of Russian oil. To curb the impact of the levies, Indian Prime Minister Narendra Modi rolled out consumption tax cuts. Both U.S. and India are also looking at resuming negotiations to address the trade barriers. Thursday's U.S. inflation data, seen as supportive of rate cuts, prompted traders to price a 90% chance of two more moves this year. The Fed last lowered rates in December 2024. Strengthening prospects of U.S. rate cuts has propped up currencies across Asia, with the Malaysian ringgit and the Indonesian rupiah leading the gains, as lower borrowing costs weaken the dollar and draw more money into high-yielding emerging markets. The U.S. dollar index was up 0.15% as of 1535 IST. The U.S. dollar rose on Friday, a day after falling on a surge in U.S. jobless claims and modest inflation, as investors expected the Federal Reserve to cut interest rates next week after a roughly nine-month hiatus. The greenback rose 0.3% to 147.66 yen , on track for its largest percentage gain in 10 days, after rising for three straight weeks. The dollar index was up 0.1% at 97.69, but stayed on track to post a weekly fall of under 0.1% and its second consecutive weekly decline. The University of Michigan said on Friday its Consumer Sentiment Index fell to 55.4 this month, the lowest since May, from a final reading of 58.2 in August. Economists polled by Reuters had been expecting a reading of 58.0, little changed from the month before. On Thursday, data showed the biggest weekly increase in four years in the number of Americans filing new applications for jobless benefits. However, traders have reined in bets on a larger 50 bps rate cut next month, with pricing implying a shallower path of easing before the end of the year than anticipated earlier, according to the CME Group's FedWatch tool. The benchmark 10-year Treasury note yield rose 5.1 bps to 4.062% from its U.S. close of 4.011% on Thursday, when it fell below 4% for the first time since April. The euro was down less than 0.1% at $1.1724 , a day after rising, as traders curbed their bets on another European Central Bank rate cut this cycle to bet on another move at less than 50%. Oil prices rose on Friday after a Ukrainian drone attack on a Russian port suspended loadings, outweighing pressure from oversupply concerns and weaker U.S. demand risks. Brent crude futures rose $1.01, or 1.52%, to $67.38 a barrel by 11:32 a.m. CDT, (1632 GMT) and U.S. West Texas Intermediate crude gained 56 cents, or 0.9%, to $62.93.......