UK Retail Sales Lower than Expectation

Over the course of the last week the Australian dollar has done well against Sterling, the AUDGBP rate currently sits at 0.5651.

GBPAUD Exchange Rate Forecast GBPAUD Exchange Rate Information Buying AUD with Sterling AUD to GBP Australian Dollar Forecast GBP to AUD

UK Retail Sales were a lot lower than expectation for April and fell by 2.3% month on month mainly because of a record fall in petrol sales following the stampede for petrol during the end of March. Sales of fuel were 13.2% lower in April. Analysts had forecast a yearly rise of 1% but sales were down by 1.1% so Sterling has taken a small tumble. However, more importantly the exchange rate for buying Australian Dollars has improved again to a 6 month high of 1.6160. The reason why Sterling has stayed strong is down to the Bank of England Minutes which showed a vote of 8-1 against further Quantitative Easing.

yesterday IMF head Christine Lagarde suggested that the UK could cut interest rates to stimulate the UK economy and further QE could be possible. Clearly the Bank of England will make its own decision about how to control policy for the UK and with the minutes this was proved. She also commented about the problems in Greece and said the country has a lot more to do  to fix its ailing economy. Some analysts think that Greece will be forced out of the Eurozone but personally I believe that they will yet gain be bailed out as politically, socially and economically it would be disastrous to allow Greece to be removed. It could easily spread contagion to the other ‘PIGS’ or Europe in particular Spain which has already seen one of its banks Bankia being part nationalised. Lagarde went on to say the costs of Greece leaving the Euro could be so high that other member of the Eurozone may be prepared to pay more to keep them in the single currency. Today EU leaders meet in Brussels to discuss the problems currently affecting Greece and the single currency.

With the instability surrounding Greece and Europe investors have been turned off against moving money into Australian Dollars which in turn has seen the rate to buy Australian dollars with Sterling hit the highest exchange rate this year. June 17th is the date for the Greek elections so a positive result could see the Australian Dollar strengthen against both the Pound and US Dollar as confidence returns but I think over the next few weeks the next resistance level could be 1.6250 for GBPAUD.

For more up to date information please feel free to ask me a question Tom Holian teh@currencies.co.uk quoting ‘ADF’ in teh subject title for preferential exchange rates.