German retail sales declined 0.3% MoM in April, slightly better than forecast, supporting Euro strength amid ECB rate hike bets.
EUR/CAD climbed to 1.6110 in European trading Monday, extending gains for a second day. The move followed German retail sales data, which fell 0.3% month-on-month in April, marginally outperforming the expected 0.4% drop but matching March’s revised decline.
Annual retail sales contracted 0.3%, an improvement from the prior 0.2% decline but still weak. Eurozone inflation remains elevated, with May flash data showing mixed trends—slowing in Germany but accelerating in France, Italy, and Spain, all above the ECB’s 2% target. ECB minutes revealed some policymakers pushed for a rate hike in April, bolstering expectations for a 25-basis-point increase on June 11.
The Canadian Dollar weakened amid signs of economic contraction. Canada’s GDP shrank unexpectedly in Q1 2026, marking a second consecutive annual decline, while consumer prices cooled sharply, reinforcing a dovish outlook for the Bank of Canada.