Rupee regains little strength against the US Dollar to settle higher provisionally. Rising COVID-19 cases affected forex traders’ sentiments. But the favourable run of the domestic equity market and inflow of foreign funds helped Rupee gain grounds. Rupee settles at 76.22 gaining 14 paise against the last close.
At the interbank exchange, Rupee trades between a high of 76.11 and a low of 76.30 before settling high. It is trading in a narrow range with no outside support, but tensions are degrading its value. US Dollar index with greenback’s strength slumps 0.07% to 97.24 providing room for Rupee to rise. Geopolitical issues and rising Coronavirus cases are weighing investor sentiments.
USD/INR – Crude Price Marks Positive Recovery
Brent crude oil rises 2.4% to USD 42.51 per barrel after touching the highest of USD 42.89 earlier in the day. US WTI crude surges 3.4% to USD 40.16 per barrel crossing the USD 40 mark. Crude prices rise above USD 42 per barrel in today’s session with definite signs of increasing demand and production cuts by OPEC+ providing support.
In place of market recovery, OPEC+ can improve its compliance further, and output cuts could deepen in July. Yesterday’s meet helped regain confidence and uplift the crude market. Both benchmarks surged more than 2% since Thursday totalling to a rise of around 9% this week. Recovering economies from COVID-19 lockdown and gradual increase in crude demand support the decisive run of prices. Moody’s report suggests behavioural changes may be permanent as companies encourage work from home atmosphere. Also, rising electric cars and depleting the use of Fossil fuels can lead to a decline in oil demand.
USD/INR – Gold Prices Surge with Rising Concerns
Gold prices gain momentum with concerns over the 2nd wave of Coronavirus and rising cases. Spot gold surges 1% to USD 1740.03 an ounce, and US Gold futures rise 1% to USD 1747.90 an ounce nearing the USD 1750 mark. Last month, Spot gold reached the highest at USD 1764.55 with COVID-19 tensions at the peak around the world.
A fear is prevailing in the market about another lockdown due to upturns of new COVID-19 cases in various areas. Gold is benefitting from the upcoming issues to hit USD 1750, after which the target price would be towards USD 1800. US Dollar index changes a little with the unstable US economy and relief stimulus introduction. Irrespective of long-term consequences, gold prices will be supported with the presentation of stimulus throughout the world. Further, this could be used as a hedge against inflation.
Domestic gold futures climb 0.03% to INR 47368 per 10 grams with receding border tensions between India and China. Spot gold gains INR 280 to INR 48305 per 10 gram nearing INR 50000 with positive rally of gold prices internationally.