Pound Australian dollar (GBP/AUD) slips following UK retail data
(Updated 14:00, 26/06/24) The pound Australian dollar (GBP/AUD) exchange rate has continued to weaken moving into this afternoon’s European session following the publication of the UK’s latest distributive trades survey.
The index, published by the Confederation of British Industry (CBI), printed below forecasts and came it at -24 rather than a more modest expectation of 1.
With the index confirming an unexpected reduction in both online shopping and in-store purchases, the pound (GBP) is struggling to attract investor attention in the wake of the release.
The Australian dollar (AUD) is continuing to post gains following Australia’s hotter-than-expected inflation index released overnight.
At the time of writing, GBP/AUD is trading at around AU$1.9006, down roughly 0.4% from today’s opening levels.
Original article continues below:
Pound Australian dollar (GBP/AUD) exchange rate plummets amid rising odds of RBA rate hike
The pound Australian dollar (GBP/AUD) exchange rate has tumbled this morning, striking a fresh five-week low, in the wake of Australia’s monthly consumer price index.
At the time of writing the GBP/AUD exchange rate is trading at AU$1.8953, down roughly 0.7% from this morning’s opening rate.
Australian dollar (AUD) soars following domestic inflation data
The Australian dollar (AUD) is surging against the majority of its peers this morning following the publication of some hotter-than-expected domestic inflation data.
Released overnight, Australia’s monthly CPI indicator for May rose to its highest level since November, coming in at 4%, up from April’s reading of 3.6% and beating market expectations of 3.8%.
The leap in inflation was largely put down to fuel prices, which were up by almost 10% from this time last year.
The latest index has served to completely dismantle Reserve Bank of Australia (RBA) interest rate cut bets, and in turn has seen markets increase their bets that the central bank could still enact a rate hike this year.
David Bassanese, Chief Economist at Betashares, believes this latest set of CPI data has added additional pressure onto the RBA to tighten its monetary policy in August, stating:
‘For the RBA, the concern remains that the longer inflation stays high, the greater the risk of it becoming embedded into inflation expectations and ongoing wage and price setting behaviour – particularly given the economy, despite weak growth, is still operating at a high level of capacity.’
This uptick in RBA rate hike bets has seen the ‘Aussie’ surge.
Pound (GBP) flat ahead of mid-tier data release
Although down against the Australian dollar, the pound (GBP) is muted against the remainder of its peers as UK data remains thin on the ground this morning.
However, scheduled for release later today is the Confederation of British Industry’s (CBI) latest distributive trades survey.
As the latest index is forecast to report a cooling in UK retail sales, from a reading of 8 in May to 1 in June, the pound could experience volatility in the second half of today’s European session.
GBP/AUD exchange rate forecast: Australian data to drive movement?
Looking ahead, the likely key driver of movement for the pound Australian dollar exchange rate tomorrow will be the publication of Australia’s consumer inflation expectations index for June.
Following the hotter-than-expected monthly CPI indicator, consumer inflation expectations are also forecast to rise, from 4.1% to 4.3%.
Should the data print as expected, this will likely see AUD exchange rates remain on the front foot moving into tomorrow’s session.
Turning to the pound and looking past the latest CBI distributive trades, market-moving UK data will remain scarce.
The only data release of note will come in the form of the UK’s finalised GDP data, scheduled for release on Friday. The data is only likely to trigger movement in GBP if it differs from the previous estimates. A downward revision could dent the pound while an upward revision could lend Sterling support.