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GBP/AUD is declining on Friday, after updating the year-to-date peak. On Thursday, the pound rose against all commodity currencies as investors’ appetite for riskier assets faded amid fears that the Hong Kong bill signed by US President Donald Trump could negatively impact the trade talks between Washington and Beijing.
Nevertheless, a series of economic data forced the sterling to give up its bullish ambition.
Currently, one British pound buys 1.9054 Australian dollars, down 0.07% as of 5:49 AM UTC.
Recently, market research firm GfK reported that UK consumer confidence remained at its lowest level since 2013 amid Brexit uncertainty. The Friday survey showed that the consumer confidence for November was unchanged at -14, in line with analysts’ expectations.
Joe Staton, client strategy director at GfK, commented:
“In the face of Brexit and election uncertainty, consumers are clearly in a ‘wait-and-see’ mode.”
Yesterday, the Confederation of British Industry (CBI) said that profits at UK services firms recorded the biggest decline since 2011 for a second quarter. Thus, professional and business services saw their profitability index maintaining at -25, the same figure reported in the three months to August.
CBI chief economist Rain Newton-Smith explained:
“The current economic climate is holding back UK services firms, which are reporting falling sentiment, declining volumes and weaker profitability. Neither is the outlook expected to improve.”
The UK’s services sector accounts for about 80% of the GBP, which expanded by an annual rate of 1.0% in the third quarter of this year, the weakest since 2010.
In Australia, the Housing Industry Association (HIA) reported that new home sales had kept steady during the three months to October 2019. The indicator fell 0.5% compared to the previous quarter and 3.1% from the same period last year when the housing market started to decline rapidly.
The association stated:
“Access to finance has been a significant barrier to new home construction over the past year with valuations of new homes not meeting the expectations of the buyer and requirements of the banks.”
All in all, the HIA concluded that the wider economic conditions were positive, with exports still beating all forecasts and the labour market keeping steady.
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