Currencies

LONDON (ShareCast) - The dollar continued to lose steam against major currencies on Friday, after a better than expected report on US income and as positive sentiment sparked appetite for riskier trades.

Optimism that the economic crisis is easing clipped demand for safe haven currencies.

Sentiment towards to the greenback also came under pressure from fresh calls by Chinese officials to create an alternative sovereign reserve currency, some analysts said.

The euro was trading at $1.4068 late Friday while sterling also rose against the broadly weaker buck. The pound hit a high of $1.6536 as the dollar's safe haven allure faded.

Sentiment towards the pound was also boosted by recent upbeat UK economic data and comments from the Bank of England that Britain's banks are in a healthier condition than six months ago. However in its latest Financial Stability Report the BoE added that banks are vulnerable to more economic shocks.

Comments by BoE Governor Mervyn King that the economic recovery could be a "long, hard slog", increased expectations that the central bank would not be tightening monetary policy any time soon.