The Pakistani rupee clawed back a fraction of a percent against the US dollar on Friday, closing at 277.87, even as global oil prices breached the $100-per-barrel threshold for the first time since May. The local currency's Re0.03 gain — from 277.90 on Thursday — appears almost incidental against a backdrop of surging energy costs and a resurgent greenback that pushed the yen to a 40-year low. Main Developments On Friday, the rupee settled at 277.87 per dollar, appreciating 0.01% from the previous session. The dollar index hovered near a three-week high of 101.45, lifted by rising US Treasury yields and a flight to safe-haven assets. The dollar's strength punished other major currencies: sterling slid to $1.3313, a three-week low, after losing nearly 0.5% overnight. The euro wobbled at $1.1376, drawing little relief from expectations of imminent European Central Bank rate hikes. Read also: Pakistan Finance Chief Demands Transparency in Drug Pricing Decisions Background Oil prices have been the dominant driver of currency markets this week. Brent crude advanced 37 cents to $101.06 a barrel at 0330 GMT, heading for a 14.6% weekly gain. West Texas Intermediate held near $91.20, its highest since June 11, on track for an 11.8% weekly rise. Friday's spike followed an attack by Yemen's Houthis on two Saudi oil tankers in the Red Sea, extending the Middle East conflict to a second major shipping chokepoint. The assault stoked fears of disrupted energy flows and renewed the risk of a broader US-Israeli war on Iran. Why It Matters For Pakistan, a net oil importer, every sustained rise in crude prices widens the trade deficit and puts downward pressure on the rupee. The currency's modest gain this week is fragile: if oil stays above $100 and the dollar continues to strengthen, the rupee could face renewed depreciation in the coming sessions. What's Next Traders will watch Monday's open for clues on whether the rupee can hold 277.87 or if the oil-driven dollar rally forces another retreat. The Houthi threat to Red Sea shipping and any escalation in the Iran conflict will remain key risk factors for both energy prices and emerging-market currencies.