FII outflows and uncertainties over fresh tensions in West Asia weighed on the local unit while positive sentiment in the domestic equity markets provided support, according to forex traders.

The US launched fresh airstrikes against Iran on early Thursday, and Tehran responded by targeting US-allied West Asian countries in an exchange of fire that threatened an interim deal intended to help end the war.

Back-and-forth attacks, including a day earlier, have repeatedly threatened the ceasefire. But Thursday's attacks appeared bigger all around, with sirens sounding at least three times in Bahrain, home to the US Navy's 5th Fleet headquarters, and missiles targeting Kuwait and Qatar.

At the interbank foreign exchange market, the rupee opened at 95.27 against the greenback and traded in the range of 95.22 to 95.42 before eventually settling at 95.33 (provisional), up 14 paise from its previous close.

The Indian currency appreciated by just 1 paisa to close at 95.47 against the US dollar on Thursday.

"The rupee fell to 95.42 this afternoon after gaining to 95.22 in the morning on a lower dollar index. However, buying by oil companies and importers kept the dollar up... Improved risk appetite and expectations of continued foreign portfolio inflows provided support to the rupee," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.