Euro Continues to Stagger As Additional Signs of Slowdown Emerge
The Euro did little but consolidate below 1.5580 on Friday, as German retail sales proved to be weaker-than-expected at -1.4 percent for the month of June. While this didn’t necessarily impact the currency much, the release will be useful a leading indicator for next week’s Euro-zone retail sales report and only adds to the pile of evidence suggesting that economic growth in the region is slowing rapidly. As a result, we’re likely to see the European Central Bank leave rates unchanged at 4.25 percent next Thursday. However, like the Federal Reserve, it is commentary by central bankers after the meeting that will have the greatest impact on the Euro. Estimates for Euro-zone CPI in July jumped to a fresh 16-year high of 4.1 percent from 4.0 percent, which is well above the ECB’s 2 percent target as energy and food costs remain high. Thus, there’s little doubt ‘price stability’ will be the foremost concern for Mr. Trichet, but if he suggests that a broad economic slowdown could bring price pressures down in coming months, the euro could actually sell-off across the majors.
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08-03-2008, 09:13 PM
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