Key facts
- German retail sales increased by 1.1% in May compared to the previous month.
- Analysts had forecast no change in retail sales for May.
- Year-over-year, German retail sales rose 1.6% in May.
- Monthly retail sales unexpectedly declined by 1.6% in May.
- The mixed German retail data did not significantly impact the EUR/USD exchange rate.
German retail sales experienced an unexpected increase of 1.1% in May compared to the previous month, according to data released by the Federal Statistical Office (Destatis). This figure defied analyst predictions, which had anticipated retail sales to remain unchanged. The year-over-year comparison showed a 1.6% rise, a moderation from April's revised 2.9% gain. However, the monthly data presented a contrasting picture, revealing an unexpected decline of 1.6% in retail sales, a significant reversal from April's 0.6% drop and falling short of the anticipated 0.5% increase.
Despite the mixed monthly figures, the EUR/USD exchange rate remained supported above 1.1700. This stability is attributed to broader expectations of a weakening US Dollar amid anticipated Federal Reserve rate cuts, which provided a cushion for the Euro. The mixed German data is not expected to trigger an immediate reaction from the European Central Bank (ECB), which continues to adopt a data-dependent approach to its policy decisions. While the annual increase suggests some resilience in consumer demand, the monthly contraction highlights ongoing volatility in retail activity, influenced by persistent inflationary pressures.