GBP/AUD: Aussie Advances on Better-than-Expected Retail Sales Data from ABS

GBP/AUD is declining in early trading on Friday even though Australia is hit by bushfires. The pair is currently trading at 1.9008, down 0.21% as of 6:35 AM UTC.

The Aussie has taken the lead after the Australian Bureau of Statistics (ABS) said that retail sales bounced back in November, driven by an increase in spending on household goods, clothing and at department stores during Black Friday. Nevertheless, economists said that December data would provide a more general picture.

The ABS said that retail sales rose by 0.9% in November, which is the highest growth in about two years. Analysts expected a modest increase by 0.4%, after a 0.1% growth in October.

While Boxing Day still remains an important period for shoppers, online sales during Black Friday are getting more traction.

Ben James of the ABS commented:

“While seasonal adjustment removes regular seasonal patterns associated with Black Friday based on prior results, the strong seasonally adjusted rises in a number of sub-groups this month shows that the impact of this Black Friday exceeded that of previous years.”

The indicator is like a breath of fresh air for the Reserve Bank of Australia (RBA) after it reduced interest rates three times last year to support the economy.

However, Australia is currently struggling with strong bushfires, which killed at least 27 people, burnt over 2,300 homes, destroyed about 11 million hectares of land, and killed over half a billion animals.

The bad news is that the fires seem never to end. On Thursday, the Australian government called for another mass evacuation in the southeast, which is the most populated region.

Victoria state Premier Daniel Andrews stated:

“If you receive instructions to leave, then you must leave. That is the only way to guarantee your safety. It is dangerous to be in some of these communities. We cannot guarantee your safety.”

The sterling weakened yesterday after Bank of England Governor Mark Carney said that the central bank might cut the interest rates if the British economy continues to show signs of weakness. Nevertheless, he also shared reasons why the benchmark rate should stay unchanged at the current level of 0.75%.

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