USD/INR: Rupee Slips Against US Dollar

Rising Coronavirus cases globally, Forex market remained fragile with US Dollar strengthening. Rupee drops to 76.10 against US Dollar crossing the 76.00 mark with rising global risk and weak performance of domestic equity market. After the last close at 75.79, Rupee rallied between a high of 76.84 and a low of 76.11 before settling low.

Investors sentiments remained negative, with a drop in foreign funds flow in the domestic market. Analysts expect Rupee to continue volatile with downfall until external force helps it to appreciate. US Dollar index with greenback’s strength rise by 0.12% to 96.85 against a pool of six currencies.

USD/INR – Crude Price Recovers from Last Session

Crude oil prices surge a little with the fear of 2nd wave of Coronavirus hitting the demand. Brent crude oil rose by 0.52% to USD 38.75 per barrel after losing more than USD 1 in the early session. US WTI was up by 0.41% to USD 36.49 per barrel after dropping more than 5% in the last session. Both benchmarks experienced a weekly decline in prices after surging continuously from past 6 weeks recovering from the April lows.

Fears rise among traders as new infections spike in US states with zero expectation of this pandemic getting over anytime soon. Barclays Commodities Research forecasted this year’s price to increase by USD 4 a barrel. They assume a significant deficit in oil inventory during 2nd half of the year. But, British Bank advised caution of slow recovery for this term. OPEC+ remains determined for production cuts may support oil prices and further gain momentum. US crude inventory showed a spike with a record of 538.1 million barrels as cheap imports flowed in from Saudi Arabia.

USD/INR – Gold Prices Surge with Monetary benefits

Gold demand took a turn with concerns over the 2nd wave of Coronavirus and weak projection of economic data from Britain supported the prices. Spot gold rose by 0.3% to USD 1732.08 an ounce after falling earlier due to firm US Dollar index. Gold futures declined a little by 0.1% to USD 1738.60 marking a rise over 2.5% this week.

Gold recovers from lows after UK economy data shrank 20.4% in April because of Lockdown restrictions. Strong US Dollar index with rising COVID-19 cases in US states helped keep gold prices in check. Gold can benefit from low-interest rates announced by the US Federal Reserve. SPDR gold trust holdings saw a surge by 0.5% to 1135.05 tonnes in the previous session.

The domestic gold market witnessed sharp exit with gold futures falling 0.72% to INR 47072 per 10 grams. Spot gold prices for 24 Carat rose INR 477 with profit booking in the last session with depreciating Rupee value.

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