The U.S. Dollar rose to 108.00 Yen today as a result of last week’s better than expected data from the United States regarding home sales and capital spending. This data lifted some of the concerns over the U.S. economy.
Following the passage of the U.S. housing market rescue plan by the U.S. Congress, investors feel that the beleaguered U.S. housing sector is finally stabilizing. The passage of the rescue plan, which sets up a fund of $300 billion to assist troubled homeowners and curb the worst housing slump in over 70 years, prompted a rebound in shares of financial institutions.
Recent declines in oil prices have also given investors the confidence that the outlook of the world economy is not too bad, despite the downturn of the U.S. economy.
Analysts will be looking closely at two key economic data from the U.S. later this week to find out if the U.S. Dollar will continue it’s recovery against the Euro. According to analysts, a weak U.S. payroll data could reverse the recovery of the U.S. currency.
The recovery in stock continues to take a toll on the Yen, as investors are moving out of low yielding Yen into high yielding currencies.