020 7898 0500As the political turmoil surrounding Italy and Spain rumbled on – with some reports claiming that the European Central Bank might be moved to call an urgent meeting to discuss Italy – the euro found time to make some positive gains against the dollar. The single currency also managed to strengthen against sterling following the release of several pieces of economic data.
The unemployment rate in Germany for May came in at 5.2%, which was better than the 5.3% expected, while retail sales smashed forecast. Month-over-month, sales grew by 2.3% when 0.7% had been expected. Meanwhile, business confidence in the eurozone came in at 1.45 against an expected of 1.3. Services sentiment was slightly below forecast, but both economic and industrial sentiment came in above forecast.
The markets were clearly buoyed by the releases and the euro managed to retrace some of its recent losses. We also saw inflation in Germany creep up to 2.2% in May from 1.6% the month before; this is quite an increase and is bad news for consumers. Today we will see the eurozone’s inflation rate which is expected to jump from 1.2% to 1.6%.
