The Australian Dollar is clawing its way higher versus the Pound for a third straight session on Wednesday. The Pound Australian Dollar exchange rate settled on Tuesday -0.15% at 1.9333 following a more upbeat tone from the Reserve Bank of Australia.
Today, at 09:00, GBP/AUD is trading down -0.3% at 1.9264 following stronger than forecast Australian retail sales and dire UK construction output data.
Retail sales Surge 8.5%
The Australian Dollar is on the rise on Wednesday following the release of positive retail sales numbers. In March, retail sales rose by 8.5%, this was significantly higher than the 8.2% that analysts had pencilled in, driven by panic buying. This was the largest climb in retail sales since records began in 1982.
Food sales alone surged 24% according to the National Bureau of Statistics, household goods also boomed as Australians brought the necessary items to work from home. However, the report also showed that much of the gains, particularly from food came from higher prices rather than owing to a significant increase in volumes. Retail sales adjusted for inflation increased a more stable 0.7%.
The retail sales data comes following the Reserve Bank of Australia’s rate decision earlier in the week. The RBA, as expected, kept interest rates on hold. The central bank also indicated hat it would taper its bond buying programme in an unexpectedly hawkish move, which boosted the Aussie Dollar.
Investors will now look ahead to the release of Australia’s AIG performance of services index for April and the trade balance for March due for release on Thursday morning local time.
UK Construction Activity At Standstill In April
The Pound is struggling to find buyers as the UK coronavirus death toll passes that of Italy, making the UK the worst hit county in Europe. The news comes as the UK government is yet to formally set out Britain’s exit strategy from lock down. Prime Minister Boris Johnson is due to announce easing measures this week.
Adding to the Pound’s woes, data revealed that activity in the UK construction came to a literal standstill in April. The construction PMI declined to an unbelievable 8 on the index, significantly worse than the 22 than analysts had forecast. The level 50 separates expansion from contraction. The data comes as an industry body warned that half a million construction jobs could be lost if Boris Johnson gets the exit strategy wrong.
