The Indian rupee appreciated by 31 paise to 94.24 against the US dollar in early trade on Thursday, June 25, 2026, buoyed by a weaker greenback and positive cues from the domestic equity market. However, heavy foreign institutional investor (FII) outflows capped the local unit's gains, forex traders noted.
Rupee Opens Stronger on Dollar Weakness and Equity Rally
The local unit opened at 94.24 per dollar, marking a rise of 31 paise from its previous close of 94.55 on Wednesday. The dollar index, which measures the greenback against a basket of six major currencies, slipped 0.1% in early Asian trade, providing support to emerging market currencies like the rupee.
Meanwhile, the benchmark BSE Sensex surged over 300 points in early trading, reflecting positive investor sentiment. Traders attributed the equity rally to broad-based buying across sectors, with banking and IT stocks leading the gains.
FII Outflows Limit Upside Despite Positive Triggers
Despite the positive factors, sustained selling by foreign portfolio investors weighed on the rupee's advance. Provisional exchange data showed that FIIs pulled out approximately $450 million from Indian equities over the past two sessions, driven by global risk aversion and tightening monetary conditions in developed economies.
"The rupee is benefiting from a combination of dollar weakness and domestic equity inflows, but heavy FII outflows are preventing a sharper appreciation. The 94.20 level is acting as a strong resistance in the near term," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.
Crude Oil Prices and RBI Intervention in Focus
Forex traders are also monitoring crude oil prices, which have remained elevated near $82 per barrel, adding to India's import bill and putting pressure on the rupee. The Reserve Bank of India (RBI) is likely to intervene through state-run banks to prevent excessive volatility, market participants said.
The rupee's movement will also be guided by the upcoming US GDP data and Federal Reserve commentary later this week. Any hawkish signals from the Fed could strengthen the dollar and reverse some of the rupee's recent gains.
