GBP/AUD is slightly declining on Friday after three consecutive bullish sessions, though it still maintains above 2.00. Currently, the pair is trading at 2.0414, down 0.15% as of 7:10 AM UTC. During the previous three sessions, the price gained about 1.60%.
At the moment, the price is trading close to the support line of a medium-term uptrend that started on March 25. If it breaks below it in the following hours, it can extend the decline.
Australian Retail Sales Beat Expectations in February
The Aussie is supported by retail sales data. Earlier Friday, the Australian Bureau of Statistics (ABS) reported that retail turnover increased 0.5% in February, up from the preliminary figure at 0.4% and from January’s decline to -0.3%.
Ben James of ABS commented:
“Retailers reported a range of impacts from COVID-19 in February, with increases in food retailing slightly offset by falls in more discretionary spending.”
The ABS reported an increase in food retailing (0.8%), household goods retailing (0.7%), department stores (3.1%), cafes, restaurants and takeaway food services (0.2%), and other retailing. Elsewhere, clothing, footwear and personal accessory retailing declined 2.9%.
Online retail sales contributed with 6.6% to the total figure, up from 5.6% reported in the same period last year.
Services PMI Sees Steepest Decline
However, Australia has recently tightened its social distancing measures, which will negatively affect the economy. This has been already reflected in the services sector data published yesterday. IHS Markit said that Australia’s services purchasing managers index (PMI) tumbled last month to 38.5, after February’s 49.0.
The services industry saw a record decline in new overseas business. Business confidence dropped to a record low as well. The report reads:
“Measures taken to control the spread of COVID-19 severely impacted the Australian service economy. Business activity slumped in March, falling at a rate unprecedented in the series history, with consumer services particularly hard hit. Services activity was also curtailed by bushfires and flooding reported in certain parts of Australia.”
Australian businesses operating in the services sector are concerned about the economic downturn, declining consumer demand, and uncertainty over the duration of the coronavirus outbreak.
The composite PMI, which merges both the services and manufacturing industries, dropped to 39.4 in March, from 49.0 in February.