Rupee surrendered previous gains to settle low against the US Dollar. It opened week today and further dropped to 75.38 registering a drop of 35 paise since the last close. Even though domestic financial market traded positive, Rupee fell and lost momentum to settle low against US Dollar.
At the interbank forex market, Rupee rallied between a low of 75.50 and a high of 75.00 but fell later. Forex traders’ sentiments were high with the positive domestic financial market, weak US Dollar index and reopening of the economy.
But, risks over rising cases of Coronavirus and US-China trade war concerns them. Analysts suggest that dropping INR against USD have resistance near 75.60 level after dipping from the crucial stage at 75.00. A significant rise in crude oil prices may further force Rupee to dip against the US Dollar.
Crude Oil Surges crossing USD 40 Mark
Oil price crossed USD 40 per barrel for the first time since March supported by OPEC+ production cuts, demand recovery and continuous drop in crude inventories. Brent Crude oil rose 1.5% to USD 40.16 per barrel after touching a high of USD 40.53. US WTI crude was up by 2.2% to USD 37.61 a barrel.
API presented a report of a decline in US crude inventories by 483000 barrels. An expectation is emerging on OPEC+ decision to continue with production cuts which help in a great way for recovering of crude prices. Also, recovering in oil demand is seen as economies reopen for business. Major benchmarks have experienced a continuous surge in oil prices doubling rapidly after hitting the lowest in April.
Gold Price Declines with Rising Hopes
Gold prices continue to decline as economies reopen and recover. While spot gold dipped 0.2% to USD 1722.93 an ounce. US Gold futures were down 0.3% to USD 1729.70. SPDR gold trust holdings saw a rise by 0.1% to 1129.28 tonnes as of yesterday.
Hopes on the introduction of stimulus to recover the Indian economy boosted investors’ sentiments amid the rising cases of Coronavirus worldwide. Central Banks and Governments will supply a good amount of stimulus for supporting and cushioning their economies against Coronavirus pandemic. European Central Bank is expected to provide around 500 billion Euros after the meeting scheduled on Thursday. COVID-19 vaccine is expected to enter major parts of the USA by the end of 2020 as suggested by researchers.