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THE TAKEAWAY: German retail sales are up an unexpected 0.6% in April -> Lower unemployment fuels sales growth -> EUR/USD bouncing back from 2-year lows
German retail sales grew for a second straight month, up 0.6% in April and better than the expected 0.2% rise. However, compared to the previous year, retail sales dropped 3.8% in April according to the Federal Statistics Office. March’s sales were revised higher to a 1.6% growth from the previous month.
Falling unemployment and a growing economy were responsible for better retail sales. Germany’s economy continues to grow despite the surrounding economic contraction and stays resilient in the face of a possible Greek exit from the euro. Thus far, German consumers are not worried about the possible effects of a Greek exit.
EUR/USD briefly dropped following the data release, before continuing an early session bounce from new 2-year lows below 1.2400.