THE TAKEAWAY: Euro-zone retail sales rises 1.0% in May, more than expected -> Release is key ahead of the ECB meeting -> Euro erases losses in minutes ahead of the release
Euro-zone retail sales increased at the fastest pace in over a year in May, according to Eurostat. Retail sales rose 1.0% over the month, beating expectations for a 0.3% rise in sales and better than the revised 0.2% decline in April. Retail sales declined 0.1% from May 2012.
Food, drinks, and tobacco sales increased by 0.9% over May. Finland retail sales increased 3.6% over the month and the most in the Euro-zone, while German retail sales only rose 0.8%.
The retail sales release follows an earlier report that the Euro-zone composite PMI rose to a yearly high in June, but still indicated declining activity for the seventeenth straight month. The ECB will meet tomorrow for its monthly meeting, and President Draghi said last month that the bank is considering unconventional tools to stimulate the economy.
While the Euro did not significantly react following the better than expected rise in retail sales, the single currency did rise ahead of the release and erase some of the losses seen during the PMI releases. EUR/USD is trading around 1.2950 around the time of this writing, and the pair may next see resistance around the 1.3000 key figure. The pair may see support at 1.2870, by a rising trend line from September 2012.
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EURUSDDaily: July 3, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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