The Treasury Department attracted $3.04 for each dollar of the $2.135 trillion in notes and bonds sold last year, the highest bid-to-cover ratio since the government began releasing the data in 1992 during the George H. W. Bush administration, according to data compiled by Bloomberg. The U.S. drew an all- time high ratio of 9.07 for $30 billion of four-week bills it auctioned on Dec. 20 even though they paid zero interest.

The amount of Treasuries held by foreigners has surged, with holdings rising to a record $4.66 trillion in September from $4.44 trillion at the end of 2010 and $3.69 trillion in December 2009, the latest government data show.

"The U.S. dollar was recognized as really the ultimate source of liquidity in terms of the very uncertain conditions in the euro-zone," said Stewart Hall, senior currency strategist at Royal Bank of Canada in Toronto in a telephone interview on Dec. 28. "You've also got a U.S. economic growth dynamic that is throwing off a little bit of a feel good story that is not the case in Europe and in Asia."

Economies Decouple

The value of the dollar will hold steady over the next year versus peers including the euro, yen, and U.K. pound, according to strategists and economists surveyed by Bloomberg.

Demand for American assets is increasing as consumer confidence, manufacturing and employment show the U.S. is strengthening as Europe struggles to save its currency union and the developed world weakens. U.S. gross domestic product will expand 2.1 percent next year, compared with 1.25 percent for all Group of 10 nations, Bloomberg surveys of economists show.

"In 2012, I believe the stronger U.S. data -- a relatively better performing U.S. economy -- will be a dollar positive," Ian Stannard, head of European foreign-exchange strategy at Morgan Stanley, said in a Dec. 23 interview with Owen Thomas on Bloomberg Television's "The Pulse."

Balance Sheets

A stronger U.S. economy is boosting speculation that the Fed won't need to undertake a third round of bond purchases, or quantitative easing, as central banks elsewhere expand their balance sheets to counter slowing economies.

The ECB's balance sheet expanded to a record 2.73 trillion euros, and its lending to euro-area banks jumped 214 billion euros to 879 billion euros in the week ended Dec. 23, the Frankfurt-based central bank said in a statement on Dec. 28. Its holdings were 553 billion euros more than three months ago.