The Indian Rupee appreciated by 7 paise to 85.46 against the US dollar in early trade on Thursday, June 12, 2025. This strengthening was supported by a weaker American currency, a decline in global crude oil prices, and a positive opening in the domestic equity markets. At the interbank foreign exchange market, the domestic unit opened at 85.43 against the greenback and then traded at 85.46, marking a 7 paise rise from its previous close of 85.53 on Wednesday, June 11.

However, forex traders noted that the rupee's gains were limited due to persistent foreign fund outflows. Foreign institutional investors (FIIs) were net sellers in the capital market, pulling out Rs 446.31 crore from domestic equities on Wednesday, according to exchange data. This outflow exerted some pressure on the local currency, preventing a more significant appreciation.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented on the market dynamics. "The rupee, which gained on Wednesday, opened higher as the dollar index fell yesterday and was lower on Thursday, though Asian currencies were still range-bound," Bhansali stated. He projected that the rupee is expected to trade in a range of 85.25 to 85.75, adding that "dips to the dollar get bought." Bhansali also advised that "Importers may buy for short-term hedging near 85.25 while exporters need to wait for proper levels above 85.75 to hedge."

The US dollar's weakness contributed significantly to the rupee's gains. The dollar index, which measures the greenback's performance against a basket of six major currencies, eased by 0.07 per cent to 99.02. The decline in the dollar was attributed to growing expectations of US Federal Reserve rate cuts following softer-than-expected US Consumer Price Index (CPI) data released on Wednesday. Additionally, indications from the US President about potentially extending the July 9 tariff negotiation deadline and adopting a softer stance in trade talks also weighed on the dollar.

In the domestic stock market, early trade saw positive momentum. The BSE Sensex gained 108.02 points to reach 82,623.16, while the NSE Nifty rose by 38.7 points to 25,180.10. This positive sentiment in equities provided some support to the rupee.

Meanwhile, global crude oil prices saw a slight decline. Brent crude futures, the global oil benchmark, edged lower by 0.09 per cent to $66.81 per barrel in futures trade. Softer oil prices are generally beneficial for the currency of a major oil-importing nation like India.

Looking ahead, traders and investors are keenly awaiting the release of domestic Consumer Price Index (CPI) data, due later on Thursday. This data is expected to be a key factor influencing the rupee's movement and future trajectory in the foreign exchange market.