The Rupee opened weaker on Friday, pressured by the widening conflict between India and Pakistan that may trigger increase hedging and speculative activity. The rupee on Wednesday slumped 1.04%, recording its worst session in more than two years. The currency came under pressure in the afternoon session after India reported Pakistan's attempts to engage military targets. Pakistan and India accused each other of launching drone attacks on Thursday, and Islamabad’s Defense Minister said further retaliation was “increasingly certain”. Indian equities were set to open more than 1% lower. In the two sessions following the rise in tensions, the activity of foreign investors indicates that they largely held the view that the situation would not have a lasting impact on the Indian economy. Preliminary data showed that foreign investors were net buyers of Indian equities on Thursday, after buying approximately $350 million on Wednesday. Other Asian currencies largely weakened on Friday, while the U.S. dollar rose against its major counterparts, creating additional headwinds for the rupee. The dollar headed for a weekly gain on most major peers on Friday as a U.S.-UK trade deal raised hopes of progress in looming U.S.-China talks, while bets of imminent U.S. rate cuts receded after the Federal Reserve indicated it was in no hurry. Financial Markets are heading into the weekend with the focus squarely on trade negotiations from Washington and Beijing due to begin on Saturday in Switzerland. The euro was steady in the Asia morning and down 0.6% for the week at $1.1217. The yen has weakened about 0.7% this week and hit a one-month trough of 146.18 per dollar, before steadying around 145.78. Sterling , which had rallied on news reports of an impending U.S.-UK trade deal, gave back gains when the agreement turned out to be pretty limited and struck a three-week low of $1.3220 in early trade on Friday. The Australian dollar headed for its first weekly drop in a month, with a 0.7% fall to $0.6391. The New Zealand dollar was likewise lower at $0.5892. On the central bank front this week moves were as expected with the Bank of England cutting, while Sweden, Norway and the United States left rates on hold. However Fed Chair Jerome Powell's remarks, emphasising the level of uncertainty, were taken as reducing the likelihood the Fed lowers rates any time soon and market pricing for a cut in June has drifted to about 17% from about 55% a week ago. Oil prices were little changed early on Friday after rising more than 3% in the previous session, as trade tension between top oil consumers U.S. and China showed signs of easing and Britain announced a "breakthrough" trade deal with the United States. Brent crude rose 7 cents, or 0.1%, to $62.91 a barrel while U.S. West Texas Intermediate crude was up 7 cents, or 0.1%, at $59.98 a barrel as at 0121 GMT. On Thursday, Brent settled up 2.8%, or $1.72, and WTI rose 3.2%, or $1.84.......