The Indian rupee appreciated by 26 paise, closing at 85.68 against the U.S. dollar on Tuesday (July 9, 2025), as steady foreign fund inflows and strong domestic equity markets provided a boost to the local currency, forex traders said.

The session opened on a positive note at 85.80 per dollar and gradually strengthened throughout the day, tracking upbeat investor sentiment and risk-on mood in global markets. Additionally, the softening of crude oil prices and easing geopolitical tensions added to the rupee's momentum.

According to currency analysts, foreign institutional investors (FIIs) remained net buyers in the equity markets, lending further support to the rupee. Benchmark indices also ended higher for the day, reinforcing positive cues for the forex market.

While the U.S. dollar remained firm globally ahead of upcoming inflation data and Fed commentary, the rupee managed to hold its ground on domestic tailwinds. Market participants are now eyeing key macroeconomic data due later this week for further direction.