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GBP AUD Flat Ahead of UK Retail Sales Release

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The GBP AUD exchange rate was -0.04% lower on Thursday with the pair now awaiting Friday’s retail sales report. That is unlikely to benefit the pound sterling much as consumers tighten their belts. Australian employment levels were seen at their lowest levels in almost 50 years in the latest report.

The GBP to AUD was trading at 1.7718 and has been trading in a tight range for the week. The Australian election at the weekend will likely be the driver for a breakout to new levels.

Australian employment fails to move the Aussie dollar

Australia’s unemployment levels are now at their lowest in almost 50 years as firms hire more full-time workers with wage pressure like to see further pressure on interest rates.

Figures from the Australian Bureau of Statistics on Thursday showed that the jobless rate was 3.9% in April which matched economists’ forecasts.

The number of jobs added was lower than expected with a rise of just 4,000, but that highlighted a 92,400 gain in full-time jobs being offset by an 88,400 drop in part-time work.

The fall in unemployment will be welcomed by Prime Minister Scott Morrison ahead of this weekend’s election with a close vote expected.

The latest data also hints that the Reserve Bank of Australia will raise interest rates again in June as it struggles to catch up to soaring inflation which is at 20-yr highs.

The Aussie central bank’s hike to 0.35% this month was the first since 2011 with markets now expecting a move to 0.60% at the June policy meeting.

Markets are now expecting to see Australian interest rates as high as 2.5% by the end of the year, even if that brings a slowdown in growth.

Wages are not rising quickly according to the official figures, with annual growth slightly higher in the first quarter at 2.4%. But surveys of businesses owners showed a different story as more firms admit they are having to increase pay to attract workers.

“The RBA has returned to a more forward-looking approach for labour costs amid much higher inflation, shifting on leading indications from liaison and the anticipated feed through of the still-tightening labour market to wages outcomes,” said Taylor Nugent, economist at NAB.

Northern Ireland protocol still weighs on pound, retail sales up

The UK economy awaits the release of retail sales on Friday with a slump to -7.2% expected after last month’s small increase of 0.9%. Consumers are increasingly tightening their belts in the wake of rising energy prices.

Meanwhile, the Northern Ireland protocol is still an issue for the British Pound with Boris Johnson arriving in the country for talks with the main parties.

The pound sterling is being weighed by the risk of retaliatory action from the EU after the UK confirmed that it will take action to amend parts of the deal.

Joao Vale de Almeida said that without a “credible alternative” to the protocol, unilateral UK action to override it could “nix” the entire agreement.

The post GBP AUD Flat Ahead of UK Retail Sales Release appeared first on Pound Sterling Forecast.



Source: https://www.poundsterlingforecast.com/2022/05/gbp-aud-flat-ahead-of-uk-retail-sales-release/


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