GBP/AUD is showing no direction in early trading on Thursday. The pair is currently fluctuating at 1.9076, up 0.03% as of 6:08 AM UTC.
The market is watching the Brexit developments after European Commission President Ursula von der Leyen visited UK Prime Minister Boris Johnson in London yesterday. Elsewhere, Australia is still struggling to fight wildfires.
The sterling has been under pressure after the British Retail Consortium (BRC) said yesterday that shoppers didn’t rush to spend last year. 2019 was the worst year for retailers since the mid-90s, mainly because of Brexit uncertainty.
Nevertheless, another survey showed that British shoppers have become more confident after Johnson secured his historic victory last month.
The BRC said that total retail spending declined by an annual rate of 0.9% in November and December. The two months were merged to reduce the volatility caused by fluctuations in Black Friday dates between 2018 and 2019.
BRC chief executive Helen Dickinson said:
“Looking forward, the public’s confidence in Britain’s trade negotiations will have a big impact on spending over the coming year.”
She was referring to the post-Brexit transition period when the UK has to reach a trade deal with the European bloc. Johnson made it illegal to extend this period beyond 2020, but European leaders and the British opposition claim an extension is necessary for such a complex deal.
Elsewhere, Barclaycard said that consumer spending increased by an annual rate of 1.0% last month, from 1.5% in the autumn. Supermarkets posted a decline of 0.9%.
Barclaycard’s survey showed that 41% of British consumers expressed confidence after the national election held on December 12, up from 31% from November. This is the highest level since March 2017.
However, this year much depends on the negotiations between the UK and the EU. Von der Leyen said yesterday that the UK couldn’t get a comprehensive deal within the current deadline and called for an extension. She stated:
“The more divergence there is, the more distant the partnership has to be. Without an extension of the transition period beyond 2020, you cannot expect to agree on every single aspect of our new partnership.”