The AUDGBP exchange rate was weak on Monday ahead of retail sales and trade balance data. The UK will also see retail sales data, but footfall has slowed with the recent work from home guidance. The pound sterling is being supported by news that Boris Johnson may cut the coronavirus isolation period to five days from seven.
The AUD v GBP found support at the 0.5275 level recently but was trading at 0.5280 on Monday.
UK retail footfall drops, retail sales due
The UK economy will see retail sales released today with recent figures showing a drop in footfall over the holidays. Footfall at UK outlets dropped last week, with Central London being the worst-hit due to the government’s work from home guidance, according to data released by Springboard.
Footfall was 6% lower than the week before, with Central London suffering a 25% slump. The decline on high streets was smaller, with market towns down by 2.8% and 2% higher in Outer London.
Springboard said that despite work from home guidance, it was clear that some employees did venture back to the office.
Diane Wehrle, Insights Director at Springboard said: “Somewhat inevitably – given that last week was the first return to work for many after the Christmas and New Year period, footfall declined from the week before. Indeed, 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.”
Australia will also see retail sales released and both economies may struggle to provide good numbers after recent restrictions.
Australia also releases its closely watched trade balance figures and analysts are seeing a dip to A$10.6 billion, from last month’s A$11.2 billion.
Johnson talks of cutting isolation period again for positive cases
The UK Prime Minister is said to be looking at cutting the UK’s virus isolation time to only five days from seven. The move would be a second reduction from the initial ten days and Rishi Sunak is said to support the move. The UK economy and the pound sterling could be supported by the move as citizens would boost the services sector, while the NHS would see staff shortages ease.
The Prime Minister’s spokesman said: “It is something we want done soon.”
“But what is important is that we don’t prejudge the conclusion, and that we allow those that are looking at this to consider the evidence base and provide thorough advice.”
Australia is now scrapping isolation for close contacts working in critical supply chain roles as the country looks to address workforce shortages that are affecting the food industry.
Prime Minister Scott Morrison said the new rule would not apply to customer-facing roles but only those working in “critical supply chains”.
Australia is suffering from shortages on supermarket shelves are supply chains are understaffed.