Euro got a bit of a lift against the dollar after some positive data from Germany this morning. German retail sales rose for a second straight month, up 0.6 percent in April and better than the expected 0.2 percent increase according to the Federal Statistics Office. However, compared to the previous year, retail sales dropped 3.8 percent in April. But March sales were revised higher to a 1.6 percent 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. It is evident that so far, German consumers are not concerned as much about the possible effects of a Greek exit.
Meanwhile a separate report was released after the sales data, on Germany’s unemployment, which showed a drop in the unemployment rate below 7 percent in May as Europe’s largest economy continues to perform well despite problems in the euro zone.
The May unemployment rate fell to 6.7 percent from 7 percent in April, with the total number of unemployed people down 108,000 to 2.86 million.
Germany has been the strongest euro zone economy, weathering the storm amid in the euro zone debt crisis, with two years of strong economic growth. However, it is expected to grow by less than 1 percent this year after expanding by 3 percent in 2011.
EURUSD has bounced from 2-year lows below 1.2400 to currently trade at 1.2412 at 08:30 GMT.