Dollar Headed for Biggest Gains Since '81: Bankers

The dollar is poised for its biggest advances in 28 years, according to Deutsche Bank, which predicts a 17.1% gain against the euro by the end of the year. Other banks polled by Bloomberg are similarly bullish about the greenback, which has just endured its worst quarter since 2002. Currently trading at $1.40 per euro, it should strengthen to $1.20 by year's end, according to Deutsche.

"You don’t have to bet on the recovery to be bullish on the dollar," said one trader. "If the situation stays as bad as it is, the dollar is a safe haven. And if the economy turns the corner, the US will be the first to get out of the recession."
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