If you filled up this morning, you might have noticed a higher price at a pump-a side effect of the US airstrike that killed an Iranian general on Thursday.
"This is how US-Iran tit-for-tat spirals out of control".
Mumbai: The rupee plunged by 42 paise to settle at a one-and-a-half-month low of 71.80 against the US currency on Friday due to a spike in crude oil prices after US President Donald Trump ordered the killing of a top Iranian general.
Tensions between the United States and Iran have flared over the past year as Washington reimposed sanctions on Tehran and in the aftermath of a missile and drone attack on oil installations of the Saudi Aramco company that US officials blamed Iran for.
Concern shifted to potential retaliation, and US oil companies were taking steps to evacuate workers from Iraq. The country could also use kidnappings, assassination attempts, and other smaller-scale actions to escalate tensions, but the fresh fears of large-scale conflict will push oil prices higher, he noted. However, near-term outlook of the rupee depends upon the outcome of the trade talks between the United States and China. "If the trade talks fail then the USA will go ahead with tariffs on Chinese goods from 15th December", said Rushabh Maru, Research Analyst - Currency and Commodity, Anand Rathi Shares and Stock Brokers on rupee performance.
Oil prices also found support after data showed weekly US crude stockpiles fell by the most since June. About 20 minutes into trading, the Dow Jones Industrial Average stood at 28,661.44, down 0.7 per cent. The strike also killed Abu Mahdi al-Mohandes, the deputy head of the Popular Mobilization Forces, which is an umbrella for dozens of militias that are part of the Iraqi security apparatus but include factions that swear allegiance to Iran's supreme leader. Most sectors in the S&P 500 index were lower, driven down by Materials, real-estate bucked the trend in a down tape. With the market testing new highs, emergence of geopolitical tensions could force people to book some profits. Oil prices rallied on the developments, lifting petroleum-linked companies like Apache and Halliburton, both of which rose more than two percent.