New Delhi, April 25 -- The rupee pared its initial gains and settled for the day lower by 7 paise at 85.40 against the US dollar on Friday, amid heightened geopolitical tensions and a negative trend in the domestic markets.

Forex traders said escalated geopolitical tensions, following a terror attack in Pahalgam, Jammu & Kashmir weighed on market sentiment.

Moreover, a muted trend in domestic equities and positive US dollar index dented investors' sentiment further.

At the interbank foreign exchange, the domestic unit opened at 85.17 and moved between the intra-day high of 85.08 and the low of 85.65 against the greenback. The unit ended the session at 85.40 (provisional), registering a fall of 7 paise over its previous closing level. ...