GBP/AUD Exchange Rate Skyrockets Following Robust UK Retail Sales Figures
The Pound Australian Dollar (GBP/AUD) exchange rate is trending higher this morning as some robust retail figures paints a positive picture of the UK economy.
At the time of writing the GBP/AUD exchange rate has surged 0.5% so far this morning, bringing the pairing to a new three-week high.
Pound Sterling (GBP) Exchange Rate Bolstered by Solid UK Retail Sales
The Pound (GBP) exchange rate is rocketing higher this morning as GBP investors welcome the release of the UK’s latest retail sales figures.
According to data published by the Office for National Statistics (ONS), domestic retail sales grew by 1.3% last month, down from an upwardly revised 1.8% in April, but smashing forecasts of drop to 0.5%.
The ONS attributed the upbeat figures to the good weather in May as well as the royal wedding, which encouraged spending on food and drink.
The robust sales report suggests the UK economy may be faring better than expected in the second quarter, with a rise in wages possibly prompting a sustained recovery leading into 2019.
Ruth Gregory, senior UK economist at Capital Economics, said:
‘With real pay rises in prospect, consumer spending should receive more fundamental support as the year progresses.’
‘Overall, then, today’s figures support our view that annual spending growth should pick up from 1.1% in Q1 to about 2% by early 2019, helping the economy to regain some momentum.’
Australian Dollar (AUD) Exchange Rate Tumbles on Mixed Labour Report
Meanwhile the Australian Dollar (AUD) is struggling this morning following the publication of Australia’s latest labour figures, with markets left broadly disappointed with the report.
While headline unemployment plummeted from 5.6% to 5.4%, this was not enough to mask some of the underlying weakness exposed in the report.
This weakness was seen in slower-than-expected employment growth as well as a surprise contraction in full-time employment.
GBP/AUD Exchange Rate Forecast: BoE Policy Meeting in Focus
Looking ahead, movement in the GBP/AUD exchange rate over the coming week is likely to be driven by the Bank of England’s policy meeting on Thursday.
No policy changes are expected from the upcoming meeting, by investors will still pay close attention to the meeting for any hints regarding the possibility of a rate hike in August.
Meanwhile it’s set to be a slow session for Australian data next week, with momentum in the Australian Dollar (AUD) likely to be driven by external factors, with a possibility of demand being clipped by further global trade tensions.
Comments are closed.