The US dollar strengthened overnight against the euro following the White House nomination of Ben Bernanke as the next chairman of the Federal Reserve Bank.

In early trading this morning €1 was worth $1.1974 compared to $1.1986 late last night as news of the nomination was digested.

Mr Bernanke should take over at the Fed in January when Alan Greenspan steps down after 18 years at the helm.

The markets expect the central bank to continue with its recent trend of interest rate increases as growth in the world's largest economy begins to pick up.

The dollar's rise against the euro has since been begged back with €1 worth $1.2021 a short time ago.

This rebound was prompted by positive data from the influential Ifo Institute, which found further signs of an economic recovery in Germany.

Businesses canvassed by Ifo said they were more optimistic about export opportunities and the overall outlook over the next six months.

"The economic recovery seems to be on firmer ground," said Ifo president, Hans-Werner Sinn.