THE TAKEAWAY: Euro-zone retail sales drop 0.2%, as expected -> Retail sales decline is a symptom of economic contraction -> Euro trading lower today
Euro-zone retail sales dropped 0.2% during the month of July, which was as expected and a reversal of direction from June’s 0.2% rise in retail sales. Retail sales also dropped 1.7% from July 2011, according to Eurostat.
The sale of food, drinks, and tobacco fell 0.9% in July, while non-food sector sales rose 0.9%. Spanish retail sales were down 1.9%, while German retail sales fell 0.9%. Irish retail sales grew 1.7%.
The lower retail sales are another symptom of the economic impact of the Euro-zone debt crisis. To help solve the crisis, the European Central Bank is considering a plan to buy the bonds of struggling nations like Italy and Spain, but some doubts have risen recently about the plan being presented in tomorrow’s meeting.
The Euro did not significantly react to the as-expected retail sales. In today’s session, EURUSD reversed last week’s rally and returned back towards 1.2500, where support could be provided. The pair also broke through a week and a half long upward trend line earlier today.
EURUSD 15-minute: September 5, 2012
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