AUD/GBP Exchange Rate Plummets as Australia Retail Sales Remain Flat
The Australian Dollar Pound (AUD/GBP) exchange rate tumbled again during Tuesday’s session as markets reacted to Australia’s latest retail sales figures.
At the time of writing AUD/GBP is down around 0.4% from Tuesday’s opening levels and around half a penny down from the one-month high struck at end of last week’s session.
Australian Dollar (AUD) Exchange Rate Weakened by Underwhelming Sales Figures
The Australian Dollar fell back against the Pound again on Tuesday as markets shunned the ‘Aussie’ in the wake of some disappointing domestic retail sales figures.
According to data published by the Australian Bureau of Statistics (ABS) sales growth remained flat in March after rising 0.6% the previous month, and falling short of expectations of the 0.3% rise in sales that had been forecast.
The disappointing result appears to have been led by a shortfall in Cafes, restaurants and takeaway sales last month as they fell 0.8%, with some observers suggesting this may be down a fall in tourism after the number of Chinese tourist arrivals peaked in February.
Analysts also warned that the weaker sale growth could be an ongoing trend until wage growth begins to pick back up.
Kristina Clifton, Senior Economist at Commonwealth Bank said:
‘Today’s retail trade data was disappointing, coming in lower than expectations for both March nominal trade and Q1 volumes.
Despite strong employment growth, retail trade growth is yet to gain traction. We will probably need to see further falls in the underemployment rate and a lift in household income growth before retail trade really starts to lift.’
AUD/GBP Exchange Rate Forecast: Will Hawkish Rate Decision From the BoE Allow the Pound to Rally?
Looking ahead movement in the AUD/GBP exchange rate for the remainder of this week is likely to be dominated by the Bank of England’s (BoE) latest rate decision on Thursday.
Following on from a run of soft UK economic data it now appears extremely unlikely that the BoE will committee to a rate hike this month as previous speculated.
However the Pound exchange rate could still be strengthened following the policy meeting if the bank appears optimistic on the chances of delivering another rate hike later in the year.
In the meantime the Australian Dollar may face some further losses during Wednesday’s session with the publication of Australia’s latest consumer confidence index, with analysts warning that another fall in household sentiment may be possible.