GBP AUD Slips on Retail Sales and Trade Data

GBP AUD Lower as UK Mortgage Approvals Slow

The GBP AUD exchange rate was slightly lower on Tuesday after UK retail sales came in at 2.1% for December. Retail sales data for Australia came in much stronger at 7.3% compared to expectations of 3.9%. The market also saw trade balance figures from the Australian economy with a larger than expected dip to A$9.4 billon. Markets had expected A$10.6 billion after last month’s A$11.2 billion.

The GBP to AUD saw highs this week of 1.8950 and is trading at xxx after the latest data.

UK retail sales come in at 2.1% as Christmas shoppers prop up the high st

The British Retail Consortium said that UK retail sales grew by 2.1% in December with full year growth coming in at 9.9%.

Paul Martin, UK head of retail for KPMG said that the government restrictions slowed spending in the final weeks of 2021.

Helen Dickinson, chief executive of the BRC, said:

“Despite the recent Omicron outbreak, retail sales held up through December”.

“Many people chose to shop online rather than travel to nearby high streets and shopping centres. Meanwhile, the return of work-from-home advice and reduction in Christmas social events caused formalwear sales to slow”.

However, January is likely to be tougher for the high street with footfall at UK outlets seen lower in the first week of January, according to data released yesterday by Springboard.

Footfall was 6% lower than the week before, with Central London seeing a 25% slump. The decline on high streets was less severe, with market towns down 2.8% and 2% higher in Outer London.

The government’s work from home guidance will continue to hit retail spending and the overall 6% slump was driven by high streets, which saw a 10.9% decline and shopping centres, which saw a 4.4% fall.

Springboard said that footfall at UK outlets was still much lower than in the same week of 2019 – down 21.8%.

Diane Wehrle, Insights Director at Springboard said: “…this is a familiar result in the first week of the year, having occurred every year since 2011, and the magnitude of the drop in footfall last week was almost identical to that in the same week in 2019 and slightly lower than in the same week in 2020.”

Australian trade balance disappoints, retail sales surge

The Australian trade balance disappointed with a reading of A$9.4bn, compared to expectations for $A10.8bn.

However, there was support for Australia after retail sales surged to 7.3% with expectations for 3.9%.

The reopening in Australia helped to boost consumer confidence and spending down under.

As with the UK numbers, January may be worse for Australia after the surge in virus cases far beyond anything that led to previous lockdowns.

Australian retail sales are up 5.8% on November last year at a record A$33 billion. The latest figures will be a big boost for the fourth quarter growth prospects in Australia.

“Consumers brought forward Christmas spending to take advantage of sales and minimise delivery and stock availability,” Ben James at the Bureau of Statistics said.

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