French consumer spending dropped sharply: 1.6%, much more than 0.3% that was expected. Also German retail sales fell short of expectations. But the Euro remains resilient, holding on to gains at higher support. Update.
The Euro-zone’s second largest country saw consumer spending drop sharply in April: -1.6%. This is not only significantly below expectations, but also a second drop in a row after -0.7% in March.
The zone’s largest country also disappointed: German retail sales, published a short time ago were quite disappointing: they grew by only 0.6%, less than 1.7% predicted. This came on top of a sharper fall last month: 2.7% instead of 2.1% initially reported – so the actual rise was almost nothing.
EUR/USD holds on to the 1.4375 line it managed to take earlier. Resistance is at 1.4450. Support is at 1.4282. For more levels, analysis and upcoming events, see the EUR/USD forecast.
During the Asian session, Euro/Dollar made a sharp move higher. One of the main drivers of this move was an article in Wall Street Journal suggesting that Germany is ready for new concessions regarding Greece:.
No more demand for burden sharing by the private sector, but an agreement to send more money to Greece. EUR/USD managed to break above the 1.4375 level and pushed as high as 1.4405 before consolidating.
It seems that the market praises this quick fix for Greece. It’s important to remember that citizens in rich countries are finding it harder to accept their tax payer money thrown over and over again. And also citizens of the southern countries have taken to the streets. Without a comprehensive solution, it’s just another round of happiness before the next, deeper crisis.
Further reading: Greeks Grab Their Money from the Banks – Time is Running Out
