Retail sales in eurozone fell unexpectedly in February, as consumers curtailed spending amid rising prices. The volume of retail trade in the 17-nation eurozone dropped 0.1 percent in February compared with 0.2 percent increase in January, the Eurostat said on Tuesday.
Markets had expected the retail sales in the region to go up by 0.1 percent in the month. While sales of food items remained stable in February, sales in non-food category fell 0.1 percent. Retail turnover in Spain fell 0.3 percent, posting a decline for four consecutive months.
Analysts said that worsening labor market conditions and upcoming government austerity measures in Spain will dampen sustained recovery of retail trade in the country.
Inflation in the eurozone rose from 2.3 percent in January to 2.4 percent in February year-on-year, staying above the the European Central Bank's target of slightly below two percent for the third consecutive month.
The ECB aims to keep the inflation rate below the 2 percent over a two-year period. The bank expects the inflation to peak in March.
EUR/USD fell 0.25 percent to hit 1.4184 after the release of retail sales data.