The euro lost ground on Monday, falling to its lowest level since mid-September after a Sunday report that said Portugal was under increasing pressure to accept a bailout from the European Union (EU) and International Monetary Fund (IMF).
Amid those woes, Nicolas Sarkozy, president of France, sought to gain support from President Barack Obama for G20 goals that include tighter control of commodity prices and dollar exchange rates.
Reuters reported that in the wake of suggestions of bailout pressure from France and Germany, reports that both Portugal and Germany denied, the euro fell against the dollar, with stops triggered at $1.2900 and $1.2870; its low hit $1.2860 on trading platform EBS before it regained some of its lost ground in European trade to $1.2895, leaving it somewhat flat for the day.
Last week the currency fell below its 200-day moving average to $1.3073. Technical analysts viewed this as a bad sign for the currency's continued survival. Kathleen Brooks, research director at Forex.com, said in the report, "Last week's close below the 200-day moving average was particularly bearish. There is now a risk that the euro could revisit the low $1.20s area." She continued, "But moves down are likely to be slowed by Asian reserve diversification."
Sarkozy, as current head of the G20, will seek Obama's support for greater global food price and currency stability this week in Washington. The French president intends to begin monetary system reforms to prevent countries from simply dropping their currencies to give momentum to their export business during the downturn. He also wants more transparency in both trading and pricing in commodity markets, as well as more stringent commodity derivatives trade regulation such as those being pushed for other derivatives.
Sarkozy meets with Obama on Monday in Washington. One of Sarkozy's advisors said of the meeting, "As we sense it, more multilateralism is the best answer to the increased instability in the world. We want to broach this thinking with the Americans and see if they are willing to join in such an approach, whereafter we can produce more precise proposals."
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