INR update: Geo political tensions flare up roiling market sentiments

Sentiments turned sour globally today morning as US and Iran came face to face in fresh geo political tensions in Iraq. It is in Iran's interest to ensure that the tension does not flare up. On the other hand the US is unlikely to back down if Iran or its forces show any aggression. Therefore like the North Korea geo political tensions in 2018 it is unlikely that these tensions flare up.

In a similar bout of geopolitical skirmish, recently on 14th September 2019 Saudi oil facilities in Abqaiq were attacked using drones by Iran backed rebel groups from Yemen. USDINR jumped from 71.13 to 71.98 and by the end of third day it was back at 71.17 levels. Oil took longer to normalize to pre attack levels given the concerns around restoration of supply which lasted till 30th Sep 2019.

Sustained trading in USDINR above 71.70 would technically indicate a target of 72.40. Therefore it would be prudent to wait until Monday before making a view on USDINR direction. CMP 71.65, Range 71.70-71.50.