Mumbai

The rupee surrendered its early gains and ended 19 paise lower at 95.35 against the US dollar on Thursday, as strong dollar demand from importers and corporate hedgers, along with foreign fund outflows, outweighed support from easing crude oil prices.

The domestic currency opened at 94.95 against the greenback and traded between 94.90 and 95.42 during the session before settling at 95.35, down from its previous close of 95.16.

Forex traders said the rupee initially strengthened after the US dollar weakened overnight following less hawkish remarks by US Federal Reserve Chair Kevin Warsh and softer crude oil prices. However, persistent dollar buying by importers and hedgers, coupled with foreign institutional investor (FII) outflows, erased those gains.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said uncertainty surrounding developments in US-Iran relations could keep the rupee under pressure despite positive comments from US President Donald Trump.

He added that a softer US dollar following dovish signals from the Federal Reserve and declining crude oil prices could provide support to the rupee at lower levels. According to Choudhary, traders will closely monitor US weekly jobless claims and the non-farm payrolls report, with the USD-INR pair expected to trade in the 95.00-95.60 range.

The US dollar index, which measures the greenback against a basket of six major currencies, was down 0.38 per cent at 101.00.

Meanwhile, Brent crude, the global oil benchmark, declined 1.43 per cent to USD 70.55 per barrel in futures trade.

Analysts said falling crude prices and periodic intervention by the Reserve Bank of India helped limit the rupee's losses, but continued geopolitical uncertainty and sustained foreign capital outflows are likely to keep the currency under pressure.

Dilip Parmar, Research Analyst at HDFC Securities, said the rupee weakened for a fourth consecutive session, making it one of the worst-performing Asian currencies.

"Morning intervention-led gains fell short, with the rupee closing near the day's low amid strong dollar demand from corporates. In the near term, USD/INR is likely to face resistance at 95.80 and find support around 94.40," he said.

Foreign Portfolio Investors (FPIs) remained net sellers in Indian equities during June, pulling out Rs 49,340 crore (USD 5.16 billion) amid global risk aversion, higher US bond yields and elevated domestic valuations.

According to Central Depository Services (India) Ltd (CDSL) data, total FPI outflows from Indian equities have reached Rs 2.7 lakh crore so far in 2026, exceeding the Rs 1.66 lakh crore withdrawn during the whole of 2025.

Despite the weaker rupee, domestic equity markets ended sharply higher, with the Sensex rising 579.48 points to 77,502.12 and the Nifty gaining 169.85 points to 24,175.70.

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Exchange data showed foreign institutional investors sold equities worth Rs 311.82 crore on a net basis on Thursday.