The rupee opened weak in today’s session from the previous close at 75.63 against the US Dollar. INR gained momentum in the afternoon session. Registering a growth of 5 paise the Rupee touched 75.58 around 13:40 UTC. The rupee traded between a high of 75.50 and low of 75.76.
Forex investors keenly awaited the data of domestic GDP for the 4th quarter of 2019-2020. India’s GDP growth rate dropped to 3.10% in Q4. Overall India’s GDP for FY 2019-20 sank to an 11 year low of 4.2%.
The US Dollar index against a pool of 6 currencies dropped 0.08% to settle at 98.30. Rupee appreciated with the support of substantial foreign funds and weakening of US currency which boosted investors’ confidence.
Crude Oil Tracks Losses
Brent Crude oil dipped by 3.3% to USD 34.13 per barrel with a fall in August contract by 3.1%. US WTI crude oil fell by 3.8% to close at USD 32.43 registering continuous losses. The worsening of conditions between the US and China led to a drop in demand and further hurdles increase in oil prices.
Last trading day of the month tracked weak market with oil prices falling sharply. Also, the fear of the spread of the 2nd wave of Coronavirus cases in some countries resulted in the dropping of crude prices. Overall this month marked positive with gaining the most supported by production cuts by OPEC+ and positive demand from China. API data recorded a sharp decrease in crude inventory after lockdown relaxations across the economy.
Gold Price Surges with Increasing Tension
Spot Gold rose 0.1% to USD 1719.63 an ounce. US Gold futures increased by 0.4% to close at USD 1734.60. Domestic gold futures saw a hike of 0.33% to INR 46557 per 10 grams, while the local Indian spot market remained closed due to lockdown.
The rising tensions between the US and China over Hong Kong security laws created a fear situation in the market, forcing investors to invest in Gold. China has already taken action which can harm Hong Kong’s freedom and power to which the US will answer in the coming days. Also, the rising cases of Coronavirus cases in India as well as a global market with no indication of vaccine led to a surge in gold prices.