Euro presses back above $1.50 versus dollar By William L. Watts, MarketWatch LONDON (MarketWatch) -- The dollar weakened versus most major rivals Monday, after a weekend meeting of Group of 20 policymakers offered no support for the greenback. Traders also took heed of a report issued by the International Monetary Fund at the gathering of G20 finance ministers and central bankers in St. Andrews, Scotland, which said the dollar has moved closer to "medium-term equilibrium" but "still remains on the strong side." The euro pressed back above the psychologically important $1.50 level versus the U.S. unit for the first time since Oct. 26 to change hands at $1.5007, up from $1.4840 in North American trade late Friday. The single currency extended its gain after data showed German industrial production rose 2.7% in September. The dollar index (DXY 75.03, -0.63, -0.83%) , a measure of the greenback against a trade-weighted basket of rival currencies, fell 0.8% to 75.188 in recent action. As expected, the G20 communique made no mention of currency levels. Officials vowed to keep stimulus measures in place until a recovery gains a solid footing. See full story on G20. The IMF report also said the dollar is being used as a funding currency for carry trades, which involve borrowing funds denominated in lower-interest currencies -- such as the dollar and yen -- and investing in higher-yielding assets denominated in other currencies. "These trades may be contributing to upward pressure on the euro and some emerging-economy currencies," the IMF said. The report said the euro "has experienced most appreciation among major advanced economy currencies" and also "remains on the strong side of its equilibrium." "When we consider familiar assurances about securing growth aired at the G20 meeting in Scotland, then the status quo of economic policies in the U.S. and across the world has once more been confirmed," said Neil Mellor, currency strategist at Bank of New York Mellon. "All in all, therefore, it is difficult to see this policy mix as anything other than a recipe for continued dollar weakness ... particularly when we add the familiar absence of concerted plans for cooperative, corrective action by the G20," he said. Add in the IMF's "rather frank assessment" that the dollar is on the strong side, "the tolerance threshold of various central banks and finance ministries is once more back under the spotlight," Mellor said. The dollar was little changed versus the Japanese currency, trading at 89.87 yen. The British pound jumped 1.3% versus the dollar to change hands at $1.6822, while the euro slipped 0.2% versus sterling to fetch 89.12 pence. Gold futures climbed to new heights in electronic trading, with the most-active December contract tapping an intraday high of $1,109.90 an ounce, as the market extended gains from Friday's record New York finish. See Metals Stocks. Euro-zone officials have frequently complained about the weakness of the U.S. dollar, arguing that the euro is being forced to bear the brunt of adjustments between the U.S. unit and Asian currencies. Analysts at BNP Paribas emphasized that the IMF remarks referred to the dollar on a trade-weighted basis and largely reflect the undervaluation of Asian currencies, particularly the Chinese yuan. Nevertheless, "the market will take this as a green light to continue with the broader U.S. dollar bearish trade," they wrote.

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