The Euro took a bit a hit in yesterday before recovering towards the end of the trading session after the release of weaker than expected retail sales figures from Germany which threw into doubt beginning of the economic recovery in Europe’s biggest economy.
German retail sales figures came in at -5.5% against analysts’ expectations for a figure of -2% and shows that although the market is cautiously optimistic that Europe has seen the worst of the coronavirus, there are still doubts lingering, and economic data it likely to be a major factor in the direction of the Euro.
On the bright side, the Euro was able to more or less brush of this news and end the day on a high note which shows, it is going to take a bit more than some disappointing data out of Europe to derail the current bull run.
The big test for the Euro will start today when key jobs data comes to the market from the US with the release of the ADP employment change followed by the non-farm payrolls data tomorrow.
If the numbers come in better than expected, we may see expectations grow of an interest rate hike from the US Federal Reserve over the coming months which may cause a sudden pullback or at least a temporary sideways movement for the European currency.