EUR/USD off session lows on retail sales data

The euro pulled back from session lows against the US dollar, following the release of Retail Sales report in the Euro zone.

EUR/USD cross jumped off current session low at 1.2923 to reach 1.2964 at 9:05 GMT. Currently the pair was trading at 1.2952, down by 0.21% for the day.

Earlier today it was reported, that retail sales in the single currency zone unexpectedly rose in May, which could be a signal that consumer goods demand may prove favorable to frail recovery in the region, expected later this year. Sales increased by 1.0% in May, compared to April, eliminating the registered 0.2% drop in the previous two months. This increase has been the largest since January 2013. Sales of first necessity goods rose by 0.9%, the largest jump in the past two years, contributing to the overall results the most. In annual terms, retail sales contracted by a mere 0.1% in May, significantly better than the 1.0% drop, recorded in April. Preliminary estimates were exceeded.

Additionally, PMI indicators in the sector of services in Euro zones first four largest economies showed mixed results. The Final Services PMI in the single currency zone fell to 48.3 in June from 48.6 in the preceding month. German Final Services PMI slowed down in June as well, showing 50.4, down from 51.3 in May. In Italy the PMI in services stood at 45.8 in June, down from 46.5 in May. On the other hand, in France the Final Services PMI managed to advance to 47.2 in June from 46.5 in May, while in Spain it surprisingly rose to 47.8 in June from 47.3 a month ago. Activity in the sector of services decreased at the slowest pace in the past 15 months. These results added to the overall Euro region revitalization, implying that the single currency zone probably overcame the worst part of the recession period through the course of the past 1.5 years. PMI data showed also that recovery was going unevenly in the single currency bloc, especially with the political crisis in Portugal in the background.

Meanwhile, market players began turning their attention to the series of crucial indicators, regarding the state of US economy, scheduled for release later in the trading day.