The Eurozone’s retail sales rose by 1% year-over-year in August, following a revised increase of 2.1% in July, according to Eurostat. On a monthly basis, sales grew by 0.1%, compared to July’s adjusted drop of 0.4%, matching market expectations. The Euro is losing value, with EUR/USD down by 0.65% to 1.1666. It has also weakened against the Australian Dollar, as seen in daily percentage changes.

Performance Of The Euro

The heat map displays how the Euro fares against other major currencies today. It has varied performance, showing a 0.54% loss against the Canadian Dollar and a 0.69% drop versus the Australian Dollar. Looking back, we can recall that in August 2021, a 1% rise in retail sales was viewed as a slowdown from the previous month’s 2.1% growth. At that time, this hardly affected the EUR/USD pair, which was around 1.1666. Today, the economic context is quite different, making that previous slowdown seem minor. Recent data from August 2025 indicated that Eurozone retail sales actually fell by 0.5% compared to last year, underscoring ongoing weak consumer demand. This trend has continued throughout 2024, as high living costs have kept household spending low. The weak consumer activity complicates the European Central Bank’s (ECB) decisions. With inflation around 2.8%, well above the ECB’s goal, policymakers hesitate to lower interest rates despite stagnant growth. This creates uncertainty about when any monetary easing might occur. Traders should consider strategies that could benefit from a potential jump in currency volatility.

Trading Strategies

We suggest buying options straddles on the EUR/USD, with expirations set for after the next two ECB meetings. This strategy lets you profit from a significant price change in either direction, whether the ECB opts for a hawkish stance or a dovish shift to support the economy. The currently low implied volatility in the options market offers a good entry point for this position. For those looking for a more directional approach, the Euro’s outlook seems downward given the weak consumer data. Establishing short positions in EUR futures or buying put options could be a sound strategy. We are closely monitoring the 1.0500 level in EUR/USD as a key support point that, if breached, might lead to further sales. It’s also wise to consider cross-currency pairs since the Euro shows widespread weakness. Selling the Euro against currencies supported by more aggressive central banks or stronger economic fundamentals, like the Australian Dollar, presents a great opportunity. In particular, the EUR/AUD cross-rate looks susceptible to further drops as the interest rate gap is expected to widen. Create your live VT Markets account and start trading now.

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