GBP/AUD Exchange Rate Rangebound on UK Sales Figures
The Pound to Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning as market’s digest the UK’s latest retail sales figures.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.9370, virtually unchanged from this morning’s opening rate.
Pound (GBP) Struggles on Dire Sales Figures
The Pound (GBP) is rangebound against the Australian Dollar (AUD) this morning after data revealed UK retail sales fell off a cliff last month.
According to data published by the Office for National Statistics (ONS) UK sales growth nosedived from –0.3% to –5.1% in March, plunging to their worst levels on record as the coronavirus lockdown saw most of the highstreet shuttered.
In March 2020, retail sales volumes fell sharply by 5.1% as many stores ceased trading from the 23rd March, following official government guidance during the #coronavirus pandemic.
This was the largest fall since the series began https://t.co/s8b9bwOHHZ pic.twitter.com/9H2Mi7E0iq
— Office for National Statistics (ONS) (@ONS) April 24, 2020
However so far the Pound has been able to hold its ground this morning, likely due to the collapse coming as little surprise and thanks to a few pockets of hope in an otherwise gloomy report.
Karen Johnson, head of retail & wholesale at Barclays Corporate Banking, comments:
‘Although the headline figures were expected, there have been some glimmers of hope amongst the shutdown, with spend on food and drink a notable (if not unexpected) area of success.
‘Whilst most ‘bricks and mortar’ retailers have seen walk-in demand disappear, early indications are that online spending has also performed better than predicted – showing that consumer spending has not closed down entirely.’
Australian Dollar (AUD) Undermined by Coronavirus Drug Setback
Meanwhile, the Australian Dollar (AUD) is also struggling to find support this morning as hopes for a coronavirus drug treatment were dashed as it failed its first randomised clinical trial.
Many had hoped that the antiviral drug remdesivir may work as a viable treatment for the coronavirus.
However, optimism has faded after the World Health Organization (WHO) accidentally published documents showing a Chinese trial had been unsuccessful.
The news has unsurprisingly soured the market mood, as it dampens hopes an effective drug treatment could help countries speed up the reopening of their economies.
This in turn is limiting the appeal of the risk sensitive ‘Aussie’ this morning as longer lockdowns will see the global economy sink into a deeper recession.
GBP/AUD Exchange Rate Forecast: Slump in Inflation to Weaken the ‘Aussie’?
Looking ahead, to next week’s session we may see the Pound to Australian Dollar (GBP/AUD) exchange rate look to recoup some of its recent losses following the publication of Australia’s quarterly CPI release.
Economists are forecasting inflation is likely to have slowed in the first quarter of the year as the coronavirus crisis took hold.
This may see the ‘Aussie’ relinquish some ground next week on the expectation it will put more pressure on the Reserve Bank of Australia (RBA) to consider easing its monetary policy even further.
Meanwhile, for GBP investors the spotlight next week is likely to be on domestic coronavirus developments, with a particular focus on the government’s plans for when and how it may start easing lockdown measures.