German Retail Sales surprised to the upside printing at 1.5% versus 0.4% sending EURUSD through the 1.3000 level in early morning European trade. This was the second consecutive monthly increase for the report suggesting that the German consumer remains healthy despite the general weakness in the broader Eurozone.
The news shows that confidence amongst Germanyâ€™s consumers is translating into spending. Last week the GFK consumer confidence report recorded its highest reading since 2007. The news also suggests that German economy may be transitioning from export led growth to growth driven by internal demand and as such is allaying investor fears that EZ largest economy may succumb to recession much like the rest of the region.
The EUR/USD rose through the 1.3000 level in the aftermath of the release but stalled around that figure as currency traders awaited the opening of US bourses after a two day closure due to hurricane Sandy. If risk flows pick up in North America the EUR/USD may make a move through 1.3050 level as the day progresses.