Retail spending in Germany surged to a two year high of 3.1% from a revised reading of -1.0% in July on the back of falling oil prices. Meanwhile, retail sales fell 3.0% on an annual basis, which suggests that the outlook for retail sales remains dim as Europe’s largest economy is on the brink of a recession. The dour outlook for Germany may get worse over following months as rampant inflation continues to sap purchasing power for consumers, and as the financial crisis in the US spills over into the global economy. However, the bigger than expected gain helped to boost bullish sentiment for the euro-dollar (EURUSD), and has strengthened the pair to break above 1.4125
