The AUDGBP exchange rate was higher on Tuesday after the Aussie retail sales for November surged by 7.3%. The number blew past expectations for 3.9% and helped to make up for a larger dip in the country’s trade balance. Retail sales were also released for the UK with more modest 2.1% growth in December. However, the UK had a better year-on-year return at 9.9%.
The AUD v GBP found support at the 0.5285 after seeing recent lows at 0.5275.
Aussie trade balance slips, but retail sales give growth a boost
The Australian trade balance came in lower than expected with a reading of A$9.4bn, compared to expectations for $A10.8bn. That was a disappointment after last month’s A$11.2bn.
However, there was support for the Australian dollar after retail sales surged to 7.3% on expectations for 3.9%. The reopening in Australia helped to boost consumer confidence and spending down under.
January may be tougher for Australia after the surge in virus cases, but the figures will boost the Q4 growth outlook.
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.
UK retail sales seen rising by 2.1% in December
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 could be tough for the high street with footfall at UK outlets dropping in the first week of January in data released yesterday by analysts at 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 impact 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 retail destinations 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.”
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