Crude spurt 5% as US-Iran tension escalates; We think no major worry for INR

Rupee opens weaker at 69.74 as against yesterday’s close of 69.44 and during the day range could be 69.50 to 69.85. 

The gap up opening is because of spurt in US-Iran tensions after news emerged that Iran shot down one US drone and Trump tweeted “big mistake by Iran”. This resulted in almost 5% jump in crude oil which is now trading about 65. Trump has already started preparing for elections in Nov-20 and we many see increased tweets from him to supports cause. 

All other factors point to stability and no major issues. 

During the day, we need to see if crude oil is impacting only INR or other large Asian importers like Indonesia and China.