Pound Australian dollar (GBP/AUD) exchange rate muted following downbeat UK retail sales
The pound Australian Dollar (GBP/AUD) exchange rate is trading sideways today despite the latest UK retail sales surprising to the downside.
At the time of writing the GBP/AUD exchange rate is trading at AU$1.9215, virtually unchanged from this morning’s opening rate.
Pound (GBP) holds steady despite plunge in retail sales
The pound (GBP) is managing to hold steady against the majority of its peers this morning despite the release of some disappointing domestic retail sales data.
In April, the UK’s retail sector saw a downturn of 2.3%, well past estimates of a more moderate -0.4% reading, and slumping from a previous reading of -0.2%.
The Office for National Statistics (ONS) cited heavy rainfall as the primary reason for last month’s figures, which marked the lowest reading since December 2023.
Phil Monkhouse, UK Country Manager at global financial services firm Ebury, says:
‘Retailers were caught in the rain in April as retail sales volumes unexpectedly dropped by 2.3%, marking the first significant month-on-month downturn since December’s 3.3% cliff face drop. Cooling inflation and a marked dip in energy prices in April didn’t translate to heightened footfall as sticky interest rates and the wetter weather held back consumers from splashing out.’
However, despite the underwhelming data this morning, the pound is managing to stay afloat as the data has failed to move the needle on Bank of England (BoE) interest rate cut bets.
With a UK general election now taking place on 4 July, markets have almost completely ruled out a BoE rate cut in June. This is lending Sterling some support.
Australian dollar (AUD) tepid amid lack of data
The Australian dollar (AUD) is treading water against the majority of its peers this morning as a lack of Australian economic data has seen the ‘Aussie’ struggle to find a clear trajectory.
However, this morning’s marginally cheery mood has served to underpin the acutely risk-sensitive currency.
As Australian data will remain scarce for the remainder of the day, AUD movement is likely to remain limited.
GBP/AUD exchange rate forecast: Australian retail sales to buoy the Australian dollar?
Looking ahead, the primary driver of movement for the pound Australian dollar exchange rate for the first half of next week is likely to be the publication of Australia’s latest retail sales data.
Scheduled for release on Tuesday, the data is forecast to show that retail sales bounced back in April, expected to tick up from a previous reading of -0.4% to an expected 0.3% for this reading.
Should the data print as expected and confirm a rebound in Australia’s retail sector, the ‘Aussie’ could firm against its peers.
Turning to the pound, a lack of high-impact data next week may see GBP investors cast their eye to some mid-tier UK data.
On Tuesday, the latest Confederation of British Industry (CBI) distributive trades survey is forecast to show a slight uptick for May’s reading, which may offer Sterling some modest support.
However, as UK data will be few and far between next week, GBP will likely trade without a clear direction for the majority of the session.