Euro Dips Below 1.44 as Growth Figures Disappoint

Growth concerns for the Euro-Zone has spurred bearish sentiment for the euro, pushing the EURUSD below 1.44 for the first time since January 2008.

Euro-Zone retail sales rose less than expected, crossing the wires at -0.4% versus 0.1% forecast. Meanwhile, the yearly figure improved slightly, rising to -2.8% from a revised reading of -3.2% in June. The breakdown showed a sharp rise in food, drink, and tobacco sales, which suggests that the sharp rise in food prices is having an impact. As rampant inflation continues to sap purchasing power, the data point to another weak consumption number in Q3.

The preliminary GDP reading for the Euro-Zone was revised lower to 1.4% from 1.5% from the initial reading. Meanwhile, the quarterly growth figure was unchanged from the advanced reading of -0.2%. The breakdown, which was published for the first time, confirmed that weak consumption and investment were the main culprits. Household spending fell 0.2%, while gross fixed capital formation slid to -1.2% from 1.5% reading in the previous quarter. Economic data continues to highlight that the Euro-Zone economy is slowing down sharply, which is in line with expectations for overall weak Q3 GDP growth.