GBP/AUD Exchange Rate Steady as UK Retail Sales Rebound in May

GBP/AUD Exchange Rate Rangebound Following UK Sales Figures

The Pound to Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning as some upbeat UK retail sales figures helps to offset some of yesterday’s Bank of England (BoE) driven selling.

At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8084, virtually unchanged from this morning’s opening rate.

Pound (GBP) Stable on Solid Retail Sales Rebound

The Pound (GBP) is holding its ground against the Australian Dollar (AUD) and the majority of its other peers this morning following the release of the UK’s latest retail sales figures.

According to data published by the Office for National Statistics (ONS) sales growth rebounded from –18% to 12% last month, easily beating forecasts for a more modest rebound of 5.7%.

This uptick in sales growth appeared to be driven mostly by the reopening of DIY stores and garden centres in May, with the lockdown prompting many consumers to carry out some home improvements.

Analysts warn that retailers have their work cut out for themselves if they are going to maintain this momentum and lure more shoppers back to the high street in a post-Covid world however.

Ian Geddes, head of retail at Deloitte, suggests:

‘For retailers, there are two options: a difficult balancing act to between re-creating a familiar shopping experience whilst implementing and maintaining strict new hygiene practices, or innovating and re-inventing the shopping experience for a post-COVID-19 world.

‘Deloitte data shows that 46% of UK consumers currently feel safe visiting a store, but building on this confidence will be key for drawing more shoppers back to the High Street over the coming months.’

Australian Dollar (AUD) Muted amidst Cyber Attacks

At the same time, the Australian Dollar (AUD) is trading in a narrow range this morning following the news that Australia’s is being targeted by ‘sophisticated’ state-sponsored cyber attacks.

Prime Minister Scott Morrison, has claimed the hacks are widespread and targeting ‘all levels of government’ as well as its education, health, and business sectors.

Adding to concerns are Morrison’s claims that these attacks appear to be state-sponsored.

At an impromptu press conference the PM said:

‘What I can confirm, with confidence, based on the advice, the technical advice that we have received, is that this is the action of a state-based actor with significant capabilities.’

While Morrison declined to identify a culprit, fears that it could escalate tensions in the region appeared to limit the appeal of the ‘Aussie’ this morning.

GBP/AUD Exchange Rate Forecast: UK PMI’s to Offer Support to Sterling?

Turning to next week’s session, the Pound to Australian Dollar (GBP/AUD) exchange rate could see a bit of a pick-up at the start of the week with the publication of the UK’s latest PMI figures.

The preliminary releases are expected to report a solid rebound in UK manufacturing activity in June, with the service sector showing a more modest improvement given most shops didn’t reopen until the middle of the month.

Australia will also publish its latest PMI estimates at the start of next week, but with activity expected to have remained fairly muted their release may not extend similar support to the ‘Aussie’.

Matthew Andrews

Contact Matthew Andrews