Pound to Australian Dollar Exchange Rate Hit Even Lower by Retail Sales Results
The Pound to Australian Dollar (GBP/AUD) exchange rate fell after today’s key UK and Australian data was published. Britain’s outlook remains too filled with concerns despite some strong data, while Australia’s strong stats were a pleasant surprise to investors.
Despite risk-sentiment weakening, GBP/AUD has been on a downward trend this week. GBP/AUD opened the week at the level of 1.8267 and has struggled to hold its ground since.
After yesterday’s Bank of England (BoE) news, GBP/AUD took another hit lower. This morning, GBP/AUD is trending near a low of 1.8093 – which is just above the worst levels seen all year.
UK and Australian PMI projections next week could influence coronavirus and currency outlooks. Coronavirus developments will also remain in focus overall.
Pound (GBP) Exchange Rates Fail to Find Support in UK Retail Sales
The Pound (GBP) has had a bearish week this week. Today’s UK retail sales results have done little to change that, despite beating forecasts.
Britain’s May retail sales results came in at 12% month-on-month. The impressive monthly rebound was much better than the forecast 5.7%. While also better than expected though, the yearly contraction of –13.1% is keeping markets anxious.
Sterling is being kept under pressure by fears that the coronavirus will continue to hurt Britain’s economy going forward.
Australian Dollar (AUD) Exchange Rates Up despite Risk-Off Movement
Worsening market fears of a potential ‘second wave’ of coronavirus infections has caused risk-sentiment to fall.
As a currency often correlated to market risk-sentiment, the Australian Dollar’s (AUD) appeal has been limited.
However, despite this, the Australian Dollar has seen continued strength against the Pound in recent sessions. While this is partially due to Pound weakness, market optimism around Australia’s economy is also helping.
Today saw the publication of Australia’s latest retail sales stats from the Australian Bureau of Statistics (ABS). The data saw a strong rebound in activity following a dire performance in April. According to the report:
‘May rise in retail sales was the largest ever.
Preliminary figures show rises in every industry.
Large rises for clothing, footwear and personal accessory retailing and cafes, restaurants and takeaway food services.’
The data bolstered hopes that Australia’s economy could rebound from the coronavirus pandemic.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Awaiting Signs of Rebound
Market hopes that Australia’s economy will continue to weather the coronavirus pandemic is keeping the Australian Dollar (AUD) appealing. The Pound (GBP), on the other hand, is under pressure amid Britain’s own coronavirus concerns.
Investors are anxious that Britain’s economy will continue to be hit by the pandemic due to mixed handling of the outbreak. Meanwhile, investors have been impressed with Australia’s handling.
Upcoming economic data could also better-reflect this. Next week will see the publication of UK and Australian PMI projections for June. They will give markets a better idea of how economic activity is rebounding from the worst months of the pandemic.
If Britain’s economic performance is better than expected, it could give the Pound some stronger support to trade on.
On the other hand though, if fears of a ‘second wave’ worsen, this could weigh on both the Pound and the risk-correlated ‘Aussie’.
Coronavirus developments and data will be the biggest focuses for the Pound to Australian Dollar (GBP/AUD) exchange rate outlook next week.