AUD GBP Struggles for Direction with Retail Sales Due

AUD GBP Struggles for Direction with Retail Sales Due

The AUD GBP exchange rate was flat for a second day as traders await retail sales data from the Australian economy. Consumer confidence was higher this week which could suggest an improvement and retailers are hopeful of a Black Friday splurge. A Bank of England policymaker has hinted at a rate increase if the jobs market continues to rebound.

The AUD GBP exchange rate will have no economic data on Friday and is looking for direction at the 0.5400 level.

Australia post predicts biggest black Friday ever

Australia Post is preparing for a busy Black Friday and Cyber Monday, with parcel numbers expected to soar on last year’s numbers.

Many sales have already started, but the main event window is from November 26, through to Cyber Monday on November 29.

Last year saw 2.2 million Australian households joining the sales frenzy, marking November as the biggest month in Australian online shopping history, with a huge 55% jump in shopping over the previous year.

Australia Post has said that this year is already highlighting a rise in parcel volume following the Click Frenzy sales earlier in the month, which sparked a 16% online shopping spike into the week of November 13.

With early sales and the lifting of virus restrictions, Australians are expected to spend even more than the record-breaking A$5.57 billion that was spent during last November’s event.

Australian retail sales were due for the economy and set to show a rise to 2.5% from 1.3%.

Bank of England’s Haskel hints at jobs-fuelled rate hike

A Bank of England external policy member has said that UK interest rates will have to rise if the labour market remainds tight.

Speaking on Thursday at the Adam Smith Business School in Glasgow, Jonathan Haskel, who is also a professor of economics at Imperial College in London, said that much of the current inflation is due to external forces such as energy prices, but “the labour market is tight and we have to be vigilant”.

 

“We should maintain a long-term perspective. The pandemic was the worst shock to hit the UK economy in 100 years,” he said.

“In my view the prospective rise in bank rate from its emergency level — when that comes — is not a bug, but a feature. It reflects the success of the policies, mostly fiscal, health and science that have supported the economy over the pandemic.”

Traders are still hesitant on the timing of a rate rise after the expectation, and failure to raise rates creating wild swings in financial markets. BoE policymakers have been cautious on their comments and the bank’s governor has been unhappy with market reactions and criticism of the bank’s decisions. On inflation, Haskel said:

“Around 62% of inflation deviations from target is due to outside forces that are difficult for a central bank to control in the short run: echoing what the governor has said, central banks cannot grow more food, supply more gas or make the wind blow stronger”.

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