German Retail Sales increase 1.9% YoY in July vs. 2.6% expected.
- Retail Sales in Germany advanced 1.9% over the year in July.
- EUR/USD stays pressured near 1.1660 following the data.
Retail Sales in Germany rose 1.9% year-over-year (YoY) in July, following a 4.9% jump reported in June, according to official data released by Destatis on Friday.
The market forecast was for a 2.6% increase.
On a monthly basis, Retail Sales dropped 1.5% in July versus June’s 1% growth and -0.4% expected.
Market reaction
These data have a limited impact on the Euro (EUR). At the press time, EUR/USD is trading 0.15% lower on the day at 1.1666.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | 0.09% | 0.12% | 0.02% | -0.14% | -0.16% | 0.11% | |
| EUR | -0.12% | -0.02% | -0.02% | -0.10% | -0.21% | -0.24% | -0.02% | |
| GBP | -0.09% | 0.02% | -0.04% | -0.07% | -0.19% | -0.19% | 0.00% | |
| JPY | -0.12% | 0.02% | 0.04% | -0.03% | -0.27% | -0.25% | 0.07% | |
| CAD | -0.02% | 0.10% | 0.07% | 0.03% | -0.18% | -0.15% | 0.07% | |
| AUD | 0.14% | 0.21% | 0.19% | 0.27% | 0.18% | -0.05% | 0.19% | |
| NZD | 0.16% | 0.24% | 0.19% | 0.25% | 0.15% | 0.05% | 0.25% | |
| CHF | -0.11% | 0.02% | -0.00% | -0.07% | -0.07% | -0.19% | -0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
This section was published on August 29 at 4:50 GMT as a preview of the German Retail Sales release.
The German Retail Sales Overview
The Federal Statistics Office of Germany, Destatis, will publish the Retail Sales report on Friday at 06:00 GMT.
Germany's Retail Sales are expected to rise by 2.6% year-over-year (YoY) in July, in comparison to the previous increase of 4.9%. Meanwhile, the monthly Retail Sales are forecast to see a decline of 0.4% in July, following a previous increase of 1.0%.
How could the German Retail Sales affect EUR/USD?
EUR/USD is halting its three-day winning streak, remaining within the 1.1700-1.1650 range ahead of the German Retail Sales. The pair stays under selling pressure as the US Dollar rebounds on profit-taking ahead of the United States (US) Personal Consumption Expenditures (PCE) Price Index release for July. Meanwhile, German preliminary inflation readings are next in focus.
A stronger-than-expected rise in German consumer spending could support the Euro (EUR), pushing the EUR/USD pair toward the 1.1700 round level. A breakout above this level would strengthen the short-term price momentum, opening the door for a test of the monthly high at 1.1742. However, a weaker print may put downward pressure on the pair to test the initial support at the 50-day Exponential Moving Average (EMA) of 1.1607. Further declines could undermine medium-term momentum and drive the pair toward the 1.1500 psychological mark.
German economy FAQs
The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.
Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis – a set of more stringent rules to manage member states’ finances and punish ‘debt sinners’. Germany spearheaded a culture of ‘Financial Stability’ and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.
Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors – gaining in value in times of crisis, whilst falling during periods of prosperity.
German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the ‘coupon’, followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.
The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
