Euro keeps falling below $1.20

NEW YORK (CNNMoney.com) -- The euro kept falling against the dollar Monday, after plummeting below $1.20 and posting fresh four-year lows late last week.

What prices are doing: In global trading Monday, the euro slipped as much as 0.8% against the dollar to $1.1877 but then pared back some of those losses to trade around 0.2% lower against the greenback in the afternoon.

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Europe's shared currency closed below $1.20 for the first time in four years on Friday, after bleak economic statements out of Hungary and disappointing economic reports in the United States stoked fears about a global recovery.

Recent losses have put the euro near $1.18, where it traded when it debuted as a currency on Jan. 4, 1999.

Meanwhile, the dollar fell about 0.2% against the British pound to $1.448 and was flat against the Japanese yen at ¥91.88.

What's moving the market: Still fragile from the euro's big losses last week, most European stock markets declined early Monday on continued concerns about the region's debt crisis. The $1.20 mark is considered a key technical level for the euro, with prices below that level likely triggering further sell-offs, analysts say.

In a meeting of G20 finance and bank officials in Busan, South Korea, over the weekend, European Central Bank President Jean-Claude Trichet said the euro still has "remarkable" resilience and called the idea of a possible double-dip recession not credible.

But those optimistic comments weren't enough to curb the euro from staying in its $1.18 to $1.20 range Monday, said Phil Streible, senior market strategist with futures broker Lind-Waldock. He expects the euro to teeter around those levels until any other major news breaks out of Europe.

Fears about Europe's economic instability stalling a global economic recovery have caused the euro to tumble more than 12% against the dollar over the last three months, as those worries send investors flocking to the safe-haven appeal of the dollar. The greenback is considered a low-risk investment compared to foreign currencies, so it often gains in times of economic uncertainty.

Looking ahead: Currency traders will be watching for any monetary policy changes announced at a meeting between European Central Bank officials on Thursday in Frankfurt. While the euro is at four-year lows, it may not have reached policymakers may say it has yet to reach "emergency" levels, said Kathy Lien, director of currency research at Global Forex Trading.

"We don't expect the ECB to rescue the euro," Lien said. "ECB will probably air on the side of dovishness to keep monetary policy easy."