A Drop in German Retail Sales and Rising Inflation Leave ECB In A Tough Spot

[U][B]Fundamental Headlines[/B][/U]

• [B]USDJPY [/B]– Japanese household spending fell 2.7% in April-the most in 19 months. Meanwhile, the jobless rate rose to a seven month high of 4% from 3.9% and industrial production fell 0.3% in April. Also, Tokyo CPI Ex Fresh Food accelerated to 0.9% from 0.7% placing the BoJ in a difficult situation with slowing growth and rising inflation. For more news and resources, visit our Japanese Yen Currency Room.
• [B]USDCHF [/B]– Switzerland’s leading economic indicators fell to 1.09 marking the 10th consecutive decline. The forward looking indicator continues to weaken as companies outlooks diminish as their margins continue to get squeezed from rising raw material and energy costs. Growth is expected to slow to 1.5% after 3.1% in 2007. For more news and resources, visit our Swiss Franc Currency Room.
• [B]EURUSD [/B]– German April retail sales unexpectedly fell 1.7% from 0.6% the month prior, as rising inflation continues diminish consumers purchasing power. Meanwhile, the Euro-Zone CPI estimate rose to 3.6% from 3.3% in April as record oil prices continue to deteriorate the inflation outlook. The ECB’s maintaining interest rates at %4.00 has failed to rein in inflation, and now the central bank must contend with slowing growth. Discuss the topic and your trade ideas in the EUR/USD Forum.

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• [I]European Inflation Accelerates More Than Forecast As Oil Surges[/I] (link) – Bloomberg