USD/INR: Rupee Ends the Week Lower Against US Dollar

Rupee closed at 75.86 against US Dollar. It traded between 75.62 and 75.98. US Dollar index surged 0.35% to close at 99.72 with greenback’s strength. Goldman Sachs reported that India’s GDP could soar up to 20% in the 3rd quarter of 2020-2021.

The Rupee was seen very volatile in today’s session as it registered a drop of 44 paise against the previous close of 75.49 against US Dollar. Weak domestic market and rising tension between the US and China forced Rupee to drop so low. Forex investors were not cheered with the RBI’s announcement of cutting interest rates, an extension of loan repayment and benefitting the corporate for providing support to the economy.

Crude Oil Dips with Brewing Tension

Brent crude oil fell and hit the week’s low at USD 33.54 before settling at USD 34.10, dropping 5.4% per barrel. US WTI also registered a dip of 7.1% to close at USD 31.51 per barrel.

The rising tensions between the US and China created a sense of panic in the global economy leading to a fall in crude prices. China wants to exercise its power to frame new legal law for national security in Hong Kong to which US President reacted strongly. Besides, surging cases of Coronavirus globally nullified the hopes of recovery of oil prices and demand.

This year, Brent Crude dropped to an all-time low of USD 16, and US WTI fell below zero. The rising hopes of price and demand recovery have come to a standstill after crude oil prices surged to more than double in 1 month. Investors are looking forward to the Memorial Day weekend when consumption may increase.

Gold Price Ends this Week with Gains

Spot Gold rose by 0.2% to USD 1727.75 an ounce after dipping 1.4% in the last session. US gold futures were up by 0.4% at USD 1729.40. Gold is maintaining its level above USD 1700 an ounce mark with a target to surpass 2011 high in the coming months.

The rise of risk in the global economy with new tensions brewing between the US and China helped gold surge. It forced the investors to take shelter under the haven. Investors’ sentiments hit hard with a fast pace increase of Coronavirus cases in India. India reported the quickest rise in cases with a total of 1.24 lakh cases while the death toll rose to 3727. The reopening of economies is leading to Gold prices decreasing. However, global conditions are still favourable towards Gold.

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