The Indian rupee today strengthened by 25 paise to 46.39 against the US currency in early trade on hopes of fresh capital inflows into equity in line with firming trends on other Asian markets.

Dollar's losses against other currencies too supported the Indian rupee.

At the Interbank Foreign Exchange (Forex) market, the local unit appreciated by 25 paise to 46.39 a dollar. The rupee ended 20 paise lower at 46.64/65 in the previous session on Friday.

Forex dealers said expectations of capital inflows into domestic equities by foreign funds which may open higher in tandem with other Asian markets which were up over 3 per cent in early trade and dollar's weakness against other currencies, mainly supported the Indian rupee.