On Monday morning, the U.S. dollar approached a high of over three years against the yen. The last time the dollar was this high was during August of 2009. More data was released indicating the economy in the United States was gaining the needed momentum making the currency have a higher demand.
New data scheduled to be released during the week would show economic improvement, said economists. The improvement will be an increase in retail sales for the month of February and an increase in consumer prices.
However, there still exist headwinds in the U.S. economy thanks to the poor fiscal outlook, as huge budget cuts are taking place because from the so-called sequestration. Nevertheless, the Labor Department’s latest jobs report from last Friday suggested the recovery was robust and that it should have sufficient strength to accommodate the problems with budget cuts.
The report on retail sales during February is expected to show an increase of nearly 0.5% following just a 0.1% increase for January. Another separate report due out March 15 is expected to indicate that the consumer price index was also up 0.5% for February. In January, the CPI did not make any significant change.
Unemployment dropped to 7.7% from 7.9% the previous month thanks to a positive jobs report released last Friday.
Analysts said even though the threat of job cuts and government spending cuts were hanging over consumers’ heads, it did not deter households from spending in February.
The dollar is up over 3.4% for 2013 and only trails the krona from Sweden, as the top performer in the top 10 currencies from developed countries.