Pound Australian dollar (GBP/AUD) exchange rate dented following UK and Australian PMIs
The pound Australian dollar (GBP/AUD) exchange rate ticked lower this morning following the publication of the latest UK and Australian PMIs.
At the time of writing the GBP/AUD exchange rate is trading at $1.9173, down roughly 0.2% from this morning opening rate.
Pound (GBP) slips following UK PMIs
The pound (GBP) is trapped in a narrow range against the majority of its peers this morning following the UK’s latest PMI figures for May.
The preliminary data reported a larger than forecast slowdown in the UK’s all important service sector, with the index falling from 55.0 to 52.9, below market expectations of a more modest 54.7.
The index printed at its lowest level in a six-month period, however, remained over the 50 level that marks expansion for a seventh consecutive month.
Additionally, the preliminary manufacturing figure came in at a 22-month high in May, with the factory sector returning to growth as the index printed at 51.3 rather than a forecast reading of 49.5.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented:
‘The flash PMI survey data for May signalled a further expansion of UK business activity, suggesting the economy continues to recover from the mild recession seen late last year. The survey data are consistent with GDP rising by around 0.3% in the second quarter, with an encouraging revival of manufacturing accompanied by sustained, but slower, service sector growth.’
However, despite this morning’s losses, the GBP/AUD still maintains the bulk of Wednesday’s post-inflation gains.
Australian dollar (AUD) undermined by PMIs
The Australian dollar (AUD) is struggling to garner investor attention thus far following the release of Australia’s own PMIs.
Although Australia’s service sector remained firmly in expansion territory, with the index coming in 53.1, a slight downturn from April’s 53.6 reading has seen AUD exchange rates remain mostly muted following the release.
Meanwhile the manufacturing index remained unchanged at 49.6 which further failed to buoy the ‘Aussie’.
GBP/AUD exchange rate forecast: UK Retail Sales to drag on Sterling?
Looking ahead, the primary driver of movement for the pound Australian dollar exchange rate tomorrow is likely to be the UK’s latest retail sales data.
The data release is forecast to show that UK retail sales fell in April, with sales growth expected to come in at -0.4%, down from a previous reading of 0%.
Should the data print as expected, this will likely see Sterling close the week on the back foot.
Turning to the Australian dollar, a lack of domestic data for the remainder of the week will likely leave the Aussie’ to trade in line with risk dynamics.
Should markets engage in more upbeat trading conditions, AUD could strengthen, however, should a downbeat market mood prevail, AUD exchange rates are likely to dip towards the end of this week.