Euro Slips as Germany's Retail Sales Disappoint

The EUR/GBP cross retreated on Tuesday as German Retail Sales data showed a larger-than-expected decline in July. According to Destatis, retail sales fell by 3.4% month-over-month (MoM) compared to June's revised figure of -1.1%, and worse than the market expectation of a 0.4% rise.

On an annualized basis, Retail Sales dropped 2.5% in July, versus a 0.2% decline prior. The European Central Bank (ECB) policymakers have raised interest rates once and are set to hike again at their upcoming policy meeting on September 10.

Bank of England Governor Andrew Bailey downplayed the inflation threat, stating that the UK is not yet experiencing significant second-round inflation effects. Markets are fully pricing in a quarter-point increase this year and another by spring next year.