German Retail Sales Disappoint for a Third Month
THE TAKEAWAY: Retail sales decline 0.1% in June -> Third straight decline disappoints expectations -> Euro trades slightly lower
German retail sales surprisingly declined for a third straight month in June, dropping 0.1% instead of rising 0.5% as was expected by analysts. However, retail sales were up 2.9% when compared to June 2011, which was a rise from May’s 1.1% decline from a year earlier, according to the Federal Statistics Office.
The declining retail sales come as another sign of the German economy’s struggle with the Euro-zone debt crisis. Following ECB President Draghi’s pro-Euro comments last week, investors are still waiting for further confirmation of a possible Italian and Spanish bond purchase program that would have the ECB and EFSF buy the countries’ debt in primary and secondary markets.
EURUSD fell past 1.2260 following the worse than expected retail sales. The pair is still trading higher today and further volatility could be expected based on the upcoming German and Euro-zone unemployment rates, which are set be released in the upcoming hours.
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