INR weakened further today and may breach the 78 mark as predicted by many experts. Today, INR rallied to hit a low of 76.47 during the trade session before settling at 76.46 against US Dollar dropping 40 paise. Strengthening of the greenback in the overseas market also posed a problem for the Indian rupee.
INR Prediction
Indian Rupee can be among top Asian currencies to recover because of the weakening of crude oil prices. Relaxation of lockdown restrictions may further help the recovery of INR. Analysts suggest that INR may rally with an increase in foreign investment in stocks and bonds of the Indian market. Also, price disruption of crude oil is some of the significant factors that INR may again gain ground after hitting an all-time low of 76.92 this week against USD.
Gold as a Safe Haven
Domestic Gold futures saw a significant increment and touched a new high price of 46,800 per 10 grams and booked profit amid weak equity market. MCX gold futures closed at INR 46,838 for 10 grams after marking an increase of around INR 411 as compared to previous day’s close.
As market events are uncertain and investors fear due to Coronavirus crisis, gold is considered a safe investment. Experts suggest the price can surge up to INR 52000 for 10 grams in coming months. As compared to previous year’s return, this year’s return estimates to 10%, that is 15% less than 2019.
Crude Oil to Face More Challenges
Crude oil prices today experienced downfall and marked 8th-week loss amid coronavirus outbreak. Production down to zero, dropping demand and storage problems, all have contributed to the drop of crude oil by 73 cents to USD 20.60. US oil down by 84 cents to USD 15.66 per barrel. This week only, Brent crude experienced a fall of 27% in its value. Also, US West Texas Intermediate (WTI) plummeted by 14%.
Due to challenges of storing oil from and global storage space filling fast, only one option left is to cut down production. A glimpse of hope ignited from China recovery where demand for crude oil increased.