Rupee surrenders previous gains to settle low against US Dollar today with domestic equity market trading positive. After opening high at 75.49, Rupee settled at 75.59 provisionally losing eight paise since the last close. At the interbank exchange, it rallies between a low of 75.41 and a high of 75.68.
Forex traders are keenly waiting for the reaction of the US economy towards the Fed’s monetary policies. With no significant trigger movement, Rupee remains in range-bound with no external force. US Dollar index with greenback’s strength dropped 0.25% to 96.08 against a pool of 6 currencies. Surging crude prices also forced Rupee to close low against the US Dollar.
USD/INR – Crude Price Drops with Rising Inventory
Crude oil prices fell after the publishing of a report on rising crude inventories in the US. Brent Crude oil dipped 1.7% to USD 40.48 per barrel nearing towards USD 40 level. US WTI crude slumped 2.5% to USD 37.96. API reports rise by 8.4 million barrels in US crude inventory rather than falling as expected by experts.
Top benchmarks hit 3-months high on Monday surging more than double after April drop. But, experts quote that the crude market rose more than expected in the pandemic era and it was no surprise that the confidence fades. Crude oil prices are under pressure after Gulf countries decided not to extend production cuts. The official report of US Crude inventory for stock figures will be out later today.
USD/INR – Gold Prices Surge with Monetary benefits
Gold prices took a turn from falling prices to uplift in today’s session with positive expectations from Federal Reserve’s accommodative policies to battle against Coronavirus pandemic. Spot gold gains 0.2% to USD 1717.97 an ounce and US futures gold rising 0.2% to USD 1725.30 per ounce.
Gold traders hope for a smooth recovery after the Fed’s announcement to ease up the monetary policies for benefitting the economy. Weak US Dollar index further helps gold to rise with Coronavirus crisis prevailing in the economies. Goldman Sachs projected rise in gold prices to reach USD 1800 level with a target to reach USD 2000 in 12 months. US Central Banks to publish initial reports since the recession hit in February.
Domestic gold futures rose 0.12% to INR 46650 per 10 grams as global equities eased up. Also, rapid rise in Coronavirus cases in India keeps a check on investors to search and invest in safe-havens.