Dollar surges on recovery hopes

New York: The dollar rose yesterday as investors unwound bets against the US currency before the year-end on a view the US economy might be recovering more quickly than previously thought.

The dollar hit its highest level against the yen in more than six weeks and stayed near its best level against the euro in more than three months as investors who had sold the greenback for most of 2009 bought it back.

Solid figures on the US job market and retail sales earlier this month have prompted talk the US economy may recover sooner than the euro zone and Japan, helping the dollar maintain its upside momentum.

"We have a lot of traders who want to book profits this week before the end of the year," said Greg Salvaggio, senior vice-president of capital markets at Tempus Consulting in Washington.

"There's also a belief that the US economy is recovering at ... a much more rapid pace than many people have previously thought," he added. "As a result, traders are little bit anxious about the possibility of a shift in the Fed's interest rate policy next year."

The dollar climbed as high as 91.01 yen, according to Reuters data, the highest level since early November. It last traded at 90.92 yen, up 0.7 per cent on the day.