Dollar weakens against euro after G20 meet

The dollar weakened against the euro on Monday after world leaders failed to deliver specific measures to boost the global economy, dealers said, but predicted the euro's rally would not last. In late London trade, the euro rose to 1.2739 dollars from 1.2591 dollars reached late in New York on Friday. At a weekend summit in Washington leaders from the Group of 20 rich and emerging nations pledged to cooperate in fighting the global financial crisis but offered no concrete measures such as coordinated stimulus plans. "Any optimism regarding the G20 meeting is expected to evaporate quickly given the lack of any real agreement on a coordinated action plan," analysts at BNP Paribas bank said on Monday, pouring cold water on the euro's rally after weeks of decline. "We expect the dollar's corrective pullback to remain extremely limited, with any euro-dollar rebound into the 1.2800 area providing a renewed selling opportunity." The dollar also weakened against the pound and the Swiss franc. "The dollar is down against most major currencies," said Audrey Childe-Freeman at US bank Brown Brothers Harriman. "These currencies led the move lower last week and today's correction higher is already beginning to fade." Derek Halpenny, of the Bank of Tokyo-Mitsubishi said: "Expectations were low ahead of the G20 summit in Washington at the weekend given that (US) president-elect (Barack) Obama was not attending." He added: "The long statement released contains little on specifics for the financial markets to focus on." The dollar was at 97.09 yen on Monday from 97.06 yen on Friday, recovering from a drop against the Japanese currency earlier Monday. The euro was at 122.58 yen from Friday's level of 122.24. Data published on Monday revealed that Japan's economy had entered recession. With little relief from the Group of 20 summit in Washington, market attention shifted back to the worsening global economy. Worries about the US economy mounted after official data released on Friday showed US retail sales tumbled a record 2.8 percent in October as consumers hunkered down in the face of a sharply slowing economy. "The economic spillover of the financial crisis has increased and there is uncertainty about when conditions will stop getting worse," said Saburo Matsumoto, chief foreign exchange strategist at Sumitomo Trust Bank. Dealers expect further interest rate cuts by the European Central Bank in a bid to tackle a deep slump in the eurozone. Earlier this month the ECB cut its key lending rate by 0.50 percentage points to 3.25 percent. The pound recovered on Monday slightly after hitting a historic low against the euro last week, and also firmed against the greenback. The euro changed hands at 1.2739 dollars against 1.2591 dollars late on Friday, at 123.58 yen (122.24), 0.8470 pounds (0.8539) and 1.5221 Swiss francs (1.5081). The dollar stood at 97.09 yen (97.06) and 1.1959 Swiss francs (1.1976). The pound was at 1.5027 dollars (1.4733). On the London Bullion Market, the price of gold fell to 734 dollars an ounce from 747.50 dollars late on Friday.