Forex News – Euro jumps after German retail sales drop less than expected

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Germany’s July retail sales showed no monthly growth in real terms but beat expectations for a fall. Sales remain unchanged on a monthly basis, coming out flat at 0 percent change in July, but better than forecasted drop of 1.6 percent. Compared to June’s figure which showed an increase of 6.3 percent, the data give evidence of falling consumer confidence.

The data were calculated in real terms meaning they were adjusted for inflation and seasonal swings.

On a year on year basis, sales fell 1.6 percent though economists had expected a 1.9 percent drop on the year.

There are expectations for the second half of the year to be weaker as Europe’s largest and most powerful economy is suffering the effects of a faltering euro zone growth.

Recent economic data and forward-looking indicators have raised concerns over how much longer the export-geared economy can sustain its expansion in light of an expected global slowdown.

Recent GDP data showed growth in Europe’s powerhouse almost stagnated in the second quarter, adding to signs that the risk of a renewed recession in the euro region is increasing.

GfK market research company released a report last week showing German business and investor confidence plummeted this month on concern that Europe will not be able be able to contain its debt crisis.

Immediately after the sales data were released, euro jumped against the dollar, yen and sterling because the numbers weren’t as bad as forecast.