Today INR settled at 75.51 registering an increase of 22 paise against USD. Indian Rupee opened at 75.89 covered up the previous losses. Intraday, INR rallied with a high of 75.49 and low of 75.95 to close positive. USD weakened abroad as the US Dollar index dropped by 0.13% to a total of 100.11.
USD/INR: Crude Oil Price Surge
Brent Crude oil increased by 1.3% to a total of USD 30.01 and US WTI surged by 2.9% to USD 24.84. Increase in crude oil prices to adversely affect INR.
Saudi Arabia committed to extra production cuts in June that helped prices to rise. The production cut of more than 1 million BPD in June will take the total production dropping 40% as compared to April’s output. OPEC+ also agreed for further cuts of around 18000 BPD, thereby helping the oil prices gain momentum.
Analysts quoted that the oil market is far from normal conditions, but the decision by OPEC+ and Saudi Arabia will help the price soar. But, the fear 2nds wave of Coronavirus poses a severe threat to the demand and output cuts.
USD/INR: Gold Prices Increase
Spot gold price increased by 0.4% to USD 1702.69 an ounce and US gold futures surged by 0.5% at USD 1705.90 an ounce.
Gold price aimed higher due to the brewing tension in the economies as Coronavirus cases surged at an alarming rate globally. Also, Wuhan city the origin of COVID-19, reported new Coronavirus cases. This further created fear among investors around the world. Gold prices gains were capped by strengthening US currency. Also, the world’s largest gold exchange-traded fund, SPDR Gold Trust stated that their holdings have dropped by 0.05% to a total of 1081.07 tonnes.
INR to strengthen against USD as PM Modi announces a INR 20 Lakh crore package to boost Indian Economy. The stimulus package is equal to 10% of India’s GDP.