Euro-Zone Retail Sales (YOY-AUG) Surprise Forcast Come In Worse Than Expected

At -1.0 vs 0.7 ahead of ECB Rate Decision. The Euro did not have too much of a reaction and stayed in a congested rebound but has set up short-term resistance 1.3357.

EUR-USD H1 Chart:


Although no rate change is expected the IMF is pressuring the ECB to slash rates because the debt situation threatened a 2nd round of recession. There are some that think the ECB should cut rates to 1.0% from the current 1.5%. Trichet will be reluctant to make such a move with inflation above the ECB's target of 2.0% although there is a remote possiblity the European Central Bank will cut rates by 25 basis points from 1.50% to 1.25%. The bigger issue at this point seems to be the Greek situation so they will likely take a wait and see approach with Greece and then gauge the economic situation. Unless there are strong economic figures the Greece situation and sovereign debt crisis (in regards to defaults and ability to pay) will take the center stage.