The Indian rupee erased intraday gains to ease on Monday, as weaker equities raised concerns whether this year's robust capital inflows could be sustained and traders awaited the central bank's rate decision on Tuesday. The partially convertible rupee ended at 46.645/655 per dollar, off the day's peak of 46.47, and about 0.3 percent below Friday's close of 46.50/51. Last Thursday, the rupee had dropped to as low as 46.82, it’s lowest since Oct. 7^th 2009.

 Recommendation

Buy in the range of 46.70-46.60 stop loss below 46.30 Target 47.10-47.30

The US dollar and Japanese yen made headway against many of the majors, as risk aversion triggered sharp declines in US equities. Indeed, the DJIA and S&P 500 started the day on a strong note, only to reverse from their intraday highs and close down over 1 percent. On the other hand, the Dallas Fed’s manufacturing activity index edged up to a 2-year high of -3.3 in October from -6.4, as producers have benefited from the rising foreign demand spurred by the weak US dollar.

Recommendation

Sell in the range of 92.40-92.50 stop loss above 92.80 Target 91.60-91.30

The euro saw notable declines against other majors on Monday in New York as global stocks fell, reducing risk appeal. A disappointing German consumer confidence report also contributed to the weakness. Germany's consumer confidence index for November deteriorated to 4 from 4.2 points in October, a monthly survey conducted by the GfK Group showed today. The consumer climate has recorded a decline for the first time since September 2008, the research group said. Economists were expecting the index to rise to 4.5 for November.

Recommendation

Sell in the range of 1.4930-1.4940 stop loss above 1.5000 Target 1.4850-1.4810