Euro Under Pressure as Dollar Surges and German Retail Sales Falter
The EUR/USD is trading below 1.16 as the euro comes under pressure from a stronger U.S. dollar, weaker German retail sales, and rising oil prices ahead of Eurozone inflation data.
Germans' consumer spending fell sharply in July, down 3.4% compared to expectations for a 0.4% increase. This is raising concerns about the strength of the German economy, an issue that could weigh on the ECB's decision-making at a time when inflation is expected to accelerate to 3.3% in August.
The eurozone's economic growth is facing headwinds from weaker consumption and rising oil prices, which are also boosting U.S. inflation concerns. The dollar, meanwhile, is benefiting from higher Treasury yields and the more hawkish tone from Fed Chair Kevin Warsh at Jackson Hole, with markets now pricing in around a 65% probability of a September rate hike.