INDIA RUPEE-Rupee faces pressure on fresh Middle East jitters after Trump warning

By Nimesh Vora

MUMBAI, June 17 (Reuters) - The Indian rupee is likely to dip at the open on Tuesday, weighed down by rising oil prices and a decline in U.S. equity futures after U.S. President Donald Trump called for the evacuation of Tehran.

The non-deliverable forward market indicated a open in the 86.12-86.16 range, versus 86.0650 in the previous session. The Indian currency traded in a 85.94-86.23 band on Monday, finding support once again near the 86.20 level, which held firm on Friday too.

The 86.20–86.25 range is "proving difficult" to take out for dollar bulls and the probability of it being breached on Tuesday are low, said a currency trader at a Mumbai-based bank.

While the dollar/rupee pair is expected to open higher, it will likely run into offers "almost immediately".

Brent crude rose more than 1.5% on Tuesday, while U.S. equity futures declined on concerns over escalations in the Iran-Israel conflict, now in its fifth day. Sentiment was rattled by a report that Trump had asked the national security council to convene in the situation room. He cut short his visit to the Group of Seven summit in Canada.

Earlier, Trump had called for the immediate evacuation of Tehran and reiterated that Iran should have signed a nuclear agreement with the United States.

Some analysts said these events have fuelled speculation that the U.S. could be on the verge of launching military operations in Iran.

This comes after U.S equity markets had rallied and oil prices softened on Monday amid reports that Iran was looking to dial down its conflict with Israel.

"How the U.S. may get involved and how Iran may respond moving forward will certainly be crucial for the path of markets," MUFG Bank said in a note.

KEY INDICATORS:

** One-month non-deliverable rupee INRNDFOR= forward at 86.12; onshore one-month forward premium at 8.50 paise

** Dollar index =USD at 98.24

** Brent crude futures LCOc1 up 1.7% at $74.4 per barrel

** Ten-year U.S. note yield at 4.43%

** As per NSDL data, foreign investors sold a net $43.4 million worth of Indian shares on June 13

** NSDL data shows foreign investors bought a net $31.7 million worth of Indian bonds on June 13