[IFX Darika]

Risk averse traders continued to flock to the relative safety of the dollar on Friday, with the world's de facto reserve currency enjoying a solid bid amid growing speculation the steam has run out of the global recovery.

The buck hit a fresh 9-month high again the euro, which has been hammered amid concerns that Greek debt problems will spread to other fragile economies without meaningful intervention on the part of more stable euro area nations.

However, with the eurozone struggling with anemic economic growth, major economies may be hesitant to drastically boost spending in order to prevent the Greek contagion.

European officials offered vague promises to support Greece on Thursday, and are expected to detail an aid package sometime next week.

Meanwhile, encouraging US retails sales data was overshadowed by news that China is engineering a soft slowdown of its economy.

A report from the Commerce Department on Friday showed that retail sales increased by 0.5 percent in January following a revised 0.1 percent decrease in December.

Adding to worries about the sustainability of the global recovery, China, now the engine of global growth, hiked its reserve requirement on banks in order to stem lending.

Even with the Dow taking back most of a 160 point drop in early dealing, the dollar sustained most of its gains against the euro.

The dollar rose to 1.3531 versus the euro, its highest level since last May, then backed off a penny to 1.3650.

At the same time, the buck extended this week's run of choppy trading versus the sterling, bouncing back and forth near 1.5600. The buck touched an 8-month high of 1.5533 a week ago, but has since risen no further.

The dollar also remained directionless against the yen, hanging around the Y90 mark.

The eurozone continued to lag behind the global economic recovery in the fourth quarter of 2009. Gross domestic product across the eurozone grew by only 0.1% in the fourth quarter compared to the previous three-month period.

The German economy, Europe's largest, unexpectedly stagnated in the fourth quarter as final consumption expenditure and investment failed to support growth.

Better-than-forecast French growth figures may have prevented the eurozone economy from sliding back into contraction mode.

Greece, saw its output shrink by 0.8% in the fourth quarter, casting doubts about the Greek public's willingness to accept cost cutting measures aimed at getting the nation's debt under control.