Dollar on the rise as analysts back US for a faster recovery

The dollar strengthened against the pound and the euro today as analysts backed the US to recover from recession faster than Europe.

Sterling was down 0.73 cents against the greenback to $1.6447 and the euro fell 0.66 cents to $1.4004 amid forecasts it will sink to $1.20 by the end of the year.

That prediction, by CIBC World Markets, Deutsche Bank, Bank of America, and Wells Fargo, would mark the dollar's best six-month performance against European currencies since 1981.

"I'm reasonably bullish on the dollar," said Henrik Gullberg, a London-based currency strategist with Deutsche Bank.

"If you look at the data over the past few weeks, it has been consistent with the situation where the US is a quarter or two ahead of the eurozone in terms of recovery," he added.

Adam Fazio, a CIBC currency strategist, said: "We are bullish on the dollar in the near term."

The dollar also won support after China's chief central banker said there will be no "sudden changes" to its foreign exchange policy amid concerns it may ditch some of its $2 trillion of reserves.