Quiet week for GBP and AUD
The Australian British pound (GBP / AUD) exchange rate was flat at the start of the weekend as the British pound found support in the latest UK retail sales figures.
The GBP / AUD exchange rate was trading around the AU $ 1.8267 level heading into the weekend as the Aussie saw a drop in flash Australia PMI data for May.
British pound (GBP) supported by surging UK retail sales
The British pound has spent the past week steadily rising against the Australian dollar, early in the week the British pound found support in the latest step in easing the lockdown across the UK.
Although throughout the week, the British pound has stumbled over fears that the Indian variant of the virus could derail the UK’s roadmap out of lockdown and prompted investors to pull out of the timid currency against to GBP.
The British pound regained some of those losses on Friday, as higher retail sales figures in April and the UK’s fast-growing flash services PMI gave the pound support over the weekend.
Analysts at IHS Markit, which compiles the PMI survey, commented on the UK’s economic performance:
“Business expectations for the next 12 months hit a new high in May, largely reflecting an increase in order books and a faster than expected recovery in demand since the lockdown.
“ Among the small minority of companies citing poor expectations, this has been mostly attributed to Brexit issues. Some also raised concerns about the prospect of extended restrictions on international travel. However, concerns about future lockdowns and the negative impact on business activity of COVID-19 have eased significantly. ”
Australian dollar (AUD) stable on Australian Flash PMI
The Aussie dollar has traded in a mixed range for much of the past week as risky trading and a string of positive data from Australia strengthened the ‘Aussie’.
More so, towards the end of the week the Aussie found further support from Australia’s latest flash PMIs for May.
Despite falling from 58.9 in April to 58.1 in May, the Australian Composite Production Index recorded its 9th month in expansion territory.
Jingyi Pan, associate director of economics at IHS Markit, commented on PMI, saying:
“Australian private sector growth has slowed from the record high in the April survey. That said, growth has remained strong to affirm the continued improvement in economic conditions following the easing of restrictions on COVID-19. The business outlook for the coming year remained optimistic, especially in the service sector in May ”.
GBP / AUD forecast: Coronavirus developments at a glance
A quieter economic week for the UK and Australia will instead see investors keeping tabs on any development of the coronavirus.
Sterling traders will want to ensure that any indication that an increase in cases of Indian variants of the coronavirus will not hamper the easing of the UK lockdown in the coming weeks.
Investors in Australian dollars will focus on the mood of the global market, as much of the world begins to recover from the coronavirus pandemic, investors may start to take more risk.