INR rallied between 75.50 and 75.72 in intra-day against USD. Rupee settled at 75.63 gaining over 10 paise against yesterday’s close of 75.73 against US Dollar. Globally, USD weakened against Asian currencies, including INR.
Indian Equity market remained under pressure as Sensex fell by over 262 points while Nifty fell by 88 points.
US/INR and Crude Oil
Oil producers and traders saw hope today as ease of lockdown restrictions in many countries brought about an increase in demand. Analysts suggest that the overall picture is improving for the oil industry for this year and the following year.
Also, the market will soon come to normal as economies try to recover and come back on track. Swiss Bank forecasts the recovery of Brent crude oil back to USD 43 per barrel by the end of 2020 and the demand and supply of oil back to normal. Increase in crude oil prices may further put INR under pressure.
WTI crude futures saw an increase of around 7.75% to settling at USD 21.97 per barrel, while Brent crude oil futures surged by 5.5% to close at USD 28.69.
However, global demand and oil prices unlikely to recover in the near future. Crude oil suffering historic downfall last month and travel industry hit drastically, oil unlikely to rise.
USD/INR and Gold
Gold prices marked a loss in today’s session after yesterday’s gains. Spot gold dropped by 0.4% to close at USD 1695.29 per ounce and US Gold futures declined by 0.7% to settle at USD 1700.90. Analysts quoted that easing of lockdown restrictions and restarting of economies improved investors’ sentiments and thus made a shift from safe-haven to risk assets. Indian future gold saw a decline by 0.69% to INR 45490.
Last year, gold experienced a surge of over 18% because of a tariff war between US and China and interest rate cuts by the US Federal Reserve. This year, it has already gained 12% due to pumping of trillions in emergency funds and interest rate cuts to nearly zero by US Federal Reserve.
The brewing tension between US and China is keeping all the economies at bay. However, investors’ sentiments lifted due to the ease of lockdown restrictions and restarting of businesses