INR lost morning gains and stood at 75.58 against USD dropping two paise after Thursday’s close at 75.56. After opening at 75.51, Rupee touched intraday high 75.45 and fell to 75.58 against US Dollar.
Investors keenly awaiting the clarification on the relief package of INR 20 lakh crores and its implications and benefits. Due to this, forex traders were seen worried, and thus INR settled low.
USD/INR: Crude Oil
Brent Crude oil increased by 2.6% to USD 31.94 per barrel highest since the worst day in the Oil industry. US WTI surged by 2.36% to USD 28.21 per barrel. Increase in crude oil to further weaken INR against USD.
Reopening of the global economy and increased crude oil import from China picked up the pace for demand for crude. Crude futures reached the highest after hitting zero in April. The production cuts by OPEC+ and Saudi Arabia helped the recovery in oil prices. Both Brent and US WTI crude prices are on its way to mark the gains for consecutive 3rd week.
Gold Price Rise as Tension Between the US and China Increase
The trade-rift between US and China with increasing Coronavirus cases globally led to Gold prices increasing. Gold futures increased by 0.21% to INR 46750 per 10 grams. US Futures Gold jumped by 0.1% to USD 1742.30, while spot gold rose 0.1% to close at USD 1730.56 an ounce. The Indian spot market is closed due to fear of the spread of Coronavirus.
Trump refused to talk to Xi due rift of China withholding Coronavirus information. Further, he indicated to cut ties with Beijing. On Thursday, SPDR Gold trust holdings touched 1104.72 tonnes rising by 1.15%.
American Companies to Pay Taxes for Manufacturing Outside the US
US President announced that American companies would have to pay taxes for manufacturing outside the US. Companies like Apple are thinking of shift their manufacturing plant away from China due to deteriorating relations between the US and China. The main aim of the US President is to lure the American companies back to the US and thus announced such incentives to bring back the manufacturing units.