Although a survey published yesterday showed that German consumer confidence is increasing, it seems that improved sentiment hasn’t yet translated into increased spending.
A report released by the Federal Statistics Office this morning detailed an unexpected drop in German retail sales in June.
While economists were expecting sales to rise by 0.2 per cent, following May’s 0.7 per cent gain, they actually fell by a seasonally adjusted 1.5 per cent month-on-month.
On the year sales were down by 2.8 per cent.
The Euro/Pound pairing is currently trading in the region of 0.8720
After the data was released economist Christian Lips noted: ‘The second quarter is dominated by catch-up effects after a weak start into the year. Growth will slow down a bit for the rest of the year, but the economy will definitely expand and Germany will remain the growth engine for Europe.’
The result left the Euro trading slightly lower against the US Dollar, but little changed against the Pound. The common currency was able to retain the gains which saw it push above 87 pence per Euro.
Additional Euro movement is likely to occur in response to German, Italian and Eurozone employment data, although fluctuations may be limited ahead of the US Federal Reserve’s policy statement.
Economists are expecting the unemployment rate in the Eurozone to hold at 12.2 per cent.
Eurozone inflation figures will also be of interest.
Euro (EUR) Exchange Rates
As of 08:50
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3253 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8720 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4712 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6622 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3680 >