GBP/AUD continues the bearish stance on Thursday. In fact, the pair hasn’t seen a bullish day since the start of February, losing about 2.50% during this period. Currently, one Pound sterling buys 1.9239 Australian dollars, down 0.15% as of 6:50 AM UTC. The pair touched the daily low at 1.9190.
GBP/AUD – The Australian dollar extended its gains the pound after ABS published retail sales data
Acording to the data published by the Australian Bureau of Statistics (ABS), retailers in December had their worst month in two and a half years, as the shoppers were daunted by bushfires.
Retail sales declined by 0.5% in December, to A$27.77 billion ($18.75 billion), which is the worst monthly reading since August 2017. Economists polled by Reuters expected a decline of 0.2%.
However, the figures for November were surprisingly revised upward by 1% while quarterly data pointed to an inflation-adjusted increase in sales by 0.5%, which beat analysts’ forecasts.
Separately, the government released trade balance data, according to which the trade surplus slightly declined to AUD5.2 billion in the last month of 2019. The decline was caused by a larger increase in imports compared to exports. Imports rose 2.4% compared to November, while exports rose 1.4%, driven by resource exports.
The better-than-expected increase in quarterly retail sales and exports added to the gross domestic product (GDP) growth in the three months to December, which is a good sign for the Reserve Bank of Australia. The central bank left the interest rate unchanged at a record low of 0.75% earlier this week, saying that the previous three cuts in 2019 would likely support growth, especially considering a revival in the mining sector and higher infrastructure spending.
ANZ economists said in a note to investors:
“It is too early to call this a sign of a recovery in retail, but the result is certainly encouraging. Retail growth in early 2020 is at risk from the effects of bushfires and coronavirus, but the second half of the year may see an improvement in household spending.”
The Aussie has also reacted positively on the news that China would halve more tariffs on 1,717 goods imported from the US, after the signing of a phase one trade deal, citing virus risks.
