Pound Australian Dollar (GBP/AUD) exchange rate subdued following Australian retail sales release
The Pound Australian Dollar (GBP/AUD) exchange rate is trapped in a narrow range this morning after the latest Australian retail sales data showed a rebound but fell short of expectations.
At the time of writing the GBP/AUD exchange rate is trading at $1.9472, virtually unchanged from this morning’s opening rate and having recovered from a decline overnight.
Australian Dollar (AUD) holds steady on retail sales figures
The Australian Dollar (AUD) is trading sideways this morning after Australia’s latest retail sales figures printed below forecast.
January’s figure printed at 1.1%, rebounding from December’s slump of 2.7%, however it missed expectations it would increase further to 1.5%.
In the midst of cost-of-living pressures, January’s increase was put down to ‘seasonal changes’, as the survey cited ‘Black Friday’ as a key driver.
ABS’s Head of Retail Statistics, Ben Dorber, explained:
‘Retail turnover was unchanged in trend terms in January. This means there has been no growth in retail turnover when we look through the volatility of the past few months… Rather, spending patterns have shifted because of changes in seasonality around Black Friday as consumers took advantage of discounting in response to cost-of-living pressures.’
While the 1.1% growth gave the ‘Aussie’ an initial lift, the seasonal factors and below-forecast results meant the currency was unable to sustain its gains.
Preventing any further AUD gains is a cautious market mood. As a risk-sensitive currency, the ‘Aussie’ is being undermined by today’s risk-off mood.
Pound (GBP) muted despite hawkish BoE comments
The Pound (GBP) is treading water against the majority of its peers this morning. This comes despite the latest hawkish commentary from Bank of England (BoE) policymaker Catherine Mann.
Mann is one of the most hawkish members of the Monetary Policy Committee, and was one of two monetary policy members to vote for another rate hike during last month’s interest rate decision.
Yesterday, she told the Financial Times that Britain’s wealthiest consumers are making it ‘harder to curb inflation’, reinforcing her stance on tighter monetary policy.
Mann explained:
‘Consumers discipline what firms can price – they can’t pay for it, or they choose not to. There is not a lot of consumer discipline on a large enough fraction of categories of services to represent active deceleration in services price inflation.’
While these recent comments may be putting a floor under the Pound, a lack of fresh impetus for GBP is limiting its movement.
GBP/AUD exchange rate forecast: manufacturing data to infuse volatility?
Looking ahead, the primary catalyst of movement for the Pound Australian Dollar exchange rate towards the end of the week is likely to be the release of both the Australian and UK final manufacturing PMIs.
With the data releases scheduled for Thursday night and Friday morning, respectively, both sets of data are expected to print in contraction territory in February.
With the final UK manufacturing figures expected to confirm a 47.1 reading, whilst Australian data is expected to confirm a figure of 47.7, should both sets of data print as expected, this may trap the GBP/AUD exchange rate in a narrow range, and place both currencies under pressure as a result.