Euro is struggling today, thanks in large part to the increased deflation risk for the 18 country currency region. Retail sales figures are the culprit today, indicating that the Christmas shopping season didn’t do much for the eurozone economy.
The latest retail sales figures are down, show that the eurozone’s holiday shopping season didn’t go as well as expected. Retail sales in December were 1 per cent lower in 2013 than for the same month in 2012. Eurostat reported on the figures, which also indicated a 1.6 per cent drop from November 2013 to December 2013. The news was a surprise, and comes on the heels of a drop in eurozone inflation for January 2014.
Indications are that the eurozone is at risk for deflation, and that means that the European Central Bank might be called upon to reduce interest rates are take other steps to boost the economy. In fact, some expect the policymakers at the ECB to make a move as early as this week’s meeting, which takes place tomorrow. This, in general, has many expecting a lower euro. And, indeed, the euro is struggling today, particularly against the US dollar and the Japanese yen.
At 14:16 GMT EUR/USD is down to 1.3512 from the open at 1.3515. EUR/GBP is up to 0.8303 from the open at 0.8278. EUR/JPY is down to 136.9750 from the open at 137.3650.
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