Dollar at almost highest against yen since 2009

The dollar traded at almost the strongest since August 2009 versus the yen as signs the American economy is gaining momentum boosted demand for the U.S. currency.

The Dollar Index traded at almost the highest in seven months before reports this week that economists said will show retail sales improved in February and consumer prices increased. Hungary’s forint slid to a nine-month low versus the euro on concern central-bank President Gyorgy Matolcsy is concentrating power in a bid to reshape monetary policy making. The pound and the yen fell against the greenback for a fourth-straight day.

“The market has run a long way in terms of dollar strength,” Sebastien Galy, a foreign-exchange strategist in New York at Societe Generale SA, said in a telephone interview. “We’re probably mostly in a phase of consolidations, with one exception in short sterling, which still attracts as a bearish trade on Europe.”

The dollar rose 0.1% to 96.13 yen at 9:26 a.m. in New York after climbing to 96.55 on March 8, the highest level since Aug. 11, 2009. The U.S. currency was little changed at $1.2998 per euro. The yen depreciated 0.1% to 124.93 per euro after sliding to 125.92 on March 8, the weakest since Feb. 14. Sterling fell 0.3% to $1.4881.

Retail Sales

U.S. retail sales rose 0.5% in February after a 0.1% gain in January, according to a Bloomberg News survey before the Commerce Department data on March 13. A separate report on March 15 will show the consumer-price index climbed 0.5%, after being little changed in January. The jobless rate fell to a four-year low of 7.7%, the Labor Department said last week.

The threat of across-the-board cuts in government spending -- known as sequestration -- failed to deter households, economists said.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trade partners, gained 0.1% to 82.777 after climbing to 82.924 on March 8, the highest since Aug. 3.

“There are still some headwinds in the U.S. economy coming from its fiscal outlook but the recent data suggested the economic recovery is probably robust enough to accommodate the fiscal setback,” said Jane Foley, a senior foreign-exchange strategist at Rabobank International in London. “That should be positive for the dollar.”

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