Sterling unchanged as Andrew Bailey set to become BOE chair

The sterling rode out a number of news and data announcements today. On news, the markets received a confirmation on who will replace Mark Carney. In a statement, Sajid Javid said that Andrew Bailey will be the next BOE chair taking over in February. The market also received positive economic data from the UK. In the third quarter, the economy grew by 0.4%. This was higher than the previous estimate of 0.3%. The economy expanded by 1.1% in the first 9 months of the year. This was higher than the consensus estimates of 1.0%. The public sector spending increased to GBP 4.88 billion in November. Business investments rose by 0.5% in the third quarter. The market is waiting for an important Brexit vote in parliament.

The euro declined against the USD and the sterling. The currency declined after the market received some negative data from Europe. Data from GFK showed that Germany’s consumer climate declined from 9.7 to 9.6. The climate data has been declining after it peaked at 10.8 in January this year. In France, consumer spending for November rose by just 0.1%. Retail sales had risen by 0.2% in the previous month. On a positive note, Italian consumer confidence rose from 108.6 to 110.8. 

The US dollar was relatively unchanged. This is after the Bureau of Economic Analysis (BLS) released the final reading of Q3 GDP data. The numbers showed that the economy expanded by 2.1% in the third quarter. This was the same number that was released in November. On the negative side, the Personal Consumption Expenditure rose by just 1.5% in the third quarter. This was lower than the consensus estimates of 2.3% and the previous 2.4%. The core PCE prices rose by 2.1% in the quarter. Meanwhile, in Canada, headline retail sales declined by -1.2% in November. This was lower than the expected increase of 0.5%. Core retail sales declined by -0.5% after declining by -0.1% in October.

GBP/USD

The GBP/USD pair was relatively unchanged as the market reacted to news and data from the UK. The pair is trading at 1.3030, which is a few pips below the day’s high of 1.3048. The pair is slightly above the week’s low of 1.2990. The price is along the 14-day and 28-day moving averages. The Average True Range (ATR) remained at the lowest level of the week, which is a signal of low volatility. The pair will possibly end the week at the current level.

EUR/USD

The EUR/USD pair declined sharply after the market received negative data from Europe. The pair reached a low of 1.1090. This price was below the important support of 1.1110. This was along the 61.8% Fibonacci Retracement level. The price is below the 14-day and 28-day moving averages. The price is also along the lower line of the Bollinger Bands. The pair will likely remain at the current levels during the American session.

AUD/USD

The AUD/USD pair continued the upward trend that started this week after the pair formed a double bottom pattern on Tuesday and Wednesday. The pair has risen from a low of 0.6837 to a high of 0.6900. The price is above the 14-day and 28-day moving averages. It is also along the 61.8% Fibonacci Retracement level. The RSI has remained slightly below the overbought level of 70. The pair likely continue to move higher.