(Bloomberg News) The best currency forecasters say that the dollar's 13 percent slide over the past year is coming to an end as Europe's deepening debt crisis discourages bets against the world's reserve currency.

Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.

While Moody's Investors Service added to Europe's woes last week by lowering Portugal's credit ranking to junk, the dollar is regaining its status as a haven after the worst performance over the past year among 10 developed-market currencies based on Bloomberg Correlation-Weighted Indexes. The dollar is up 4.7 percent from a 17-month low on May 4 against the euro.

"There's not a lot of room left for it to weaken beyond $1.50 to the euro, and we still see it recovering to about $1.40 by year-end," said Stephen Gallo, head of market analysis at Schneider in London, who had an average margin of error of 5.05 percent across all currency pairs. "The risk of a disorderly default is, for now, much higher in Europe than in the U.S."

Hedge funds and other large speculators are no longer betting the dollar is going to collapse.

Hedge Fund Bets

Wagers on a decline against peers including the euro, yen and pound were 203,230 on July 5, data from the Commodity Futures Trading Commission in Washington showed last week. That's down from 405,267 in March, the most since at least November 2003.

"It's difficult for the dollar to fall out of bed," said Paul Mackel, director of currency strategy in London at HSBC Holdings Plc, the eighth most-accurate forecaster. "The euro- zone crisis has definitely slowed the pace of dollar weakness. The dollar is still the reserve currency of the world and will be for some time to come."

HSBC sees it ending the year at $1.44 per euro, compared with $1.4265 at the end of last week. The greenback accounted for 60.7 percent of the world's currency reserves in the first quarter, compared with 61.8 percent a year earlier, the International Monetary Fund in Washington said June 30.

America's currency rallied 1.8 percent last week against the 17-member euro, trimming its drop this year to 6.2 percent. It fell 0.2 percent versus the yen, keeping it little changed.

Dollar Index