Rupee continues to depreciate with the strengthening of the US Dollar index and weak domestic equity market. It provisionally lost 20 paise to settle at 75.79 against US Dollar. US Fed’s announcement to cut interest rates to near-zero at least this year supported the US Dollar index. The rupee ended low in the last session at 75.59.
At the interbank exchange market, Rupee traded between a low of 75.96 and a high of 75.55 before settling low. Fed’s weak projection for 2020 and outflow of foreign funds marked negativity in the domestic market. Falling crude prices could not support Rupee with the US Dollar index rising 0.16% to 96.11.
Crude Oil Hits Worst Drop
Brent crude oil fell 3.6% to USD 40.23 per barrel surrendering the early gains. US WTI crude experienced a huge drop in prices by 4% to USD 38.03 per barrel. A steep rise in US crude inventory made way for both the benchmarks heading towards the worst drop. Further, Federal Reserve’s report on the shrinking of the US economy by 6.5% this year hit the oil prices hard.
US Federal Reserve announced US unemployment figures to touch 9.3% by the end of 2020 which would make it difficult for recovery. Also, interest rates are to remain low at least for this year. An official report by the US Government showed an unexpected rise in crude inventory from 5.7 million barrels at the starting of the week to whopping 538.1 million barrels. Experts assume the continuous drop in crude oil prices amid the rising Coronavirus cases.
Gold Price Settles Flat with Expected Rise
Spot gold drops by 0.2% to USD 1733.18 an ounce after touching the highest at USD 1739.68 at the beginning of the session. US gold futures not losing much rose by 1.2% to USD 1741.40 with prices rallying to a 1-week high. SPDR Gold Trust holdings surged 0.4% to settle at 1129.50 tonnes.
US Federal Reserve committed to providing support to the economy against the battle of Coronavirus. Gold prices remain supportive with low-interest rates and policies by Central Bank for long-term. The global market is in torn and tossed condition with no signs of slowing down in COVID-19 cases. It creates trade tensions with good support to safe-haven demand.
Domestic Gold futures surge by 1.24% to INR 47204 per 10 grams with a faint picture of US economy after Fed’s meeting.