GBP/AUD has slipped in early trading on Thursday after breaking the lower side of a symmetric triangle pattern on Tuesday, which anticipated a bearish move.
The pair has declined 0.07% so far, to 1.8672 as of 05.30 AM UTC. Two weeks ago, GBP/AUD hit the highest level in three years as UK Prime Minister Boris Johnson was reaching a Brexit deal with European leaders. However, the British parliament has constantly impeded the PM’s withdrawal plan.
The Australian dollar looks stronger despite weak data from China, whose manufacturing and services activity declined more than expected.
UK Consumer Sentiment to Lowest Level in 6 Years
The British pound’s decline became steeper after market research firm GfK published the consumer sentiment data, according to which UK consumers have become the most pessimistic on the economy since 2013.
The GfK consumer sentiment declined to -14 this month from -12 in September, which is worse than what most economists anticipated. The index showed a similar reading in August and hasn’t been lower than that since July 2013.
Joe Staton, strategy director at GfK, commented:
“The ongoing machinations in Westminster appear to be impacting how we view our personal financial situation for the coming year with a notable fall in this measure in October.”
It’s worth mentioning that the survey was conducted in the two weeks through October 14, before Johnson secured a new deal with the EU.
Australia’s Building Approvals Show Unexpected Gains
The Australian dollar got support from housing market data. Last month, the number of building approvals surprisingly surged 7.6%, which helped to slow the rate of annual drop.
Approvals for private sector houses expanded by 2.8% compared to August, while the so-called “other dwellings,” which includes townhouses and apartment blocks, surged 16%.
However, economists warned that the surge might be short-lived. Economist Nelson Aston commented:
“The latest increase doesn’t signal the end of the prevailing weakness in residential construction. We are not at a turning point.”