British pound wavers as market seeks clarity on Brexit
The euro is little changed today as traders react to the final estimate of European GDP data. In a report earlier today, Eurostat said that the economy rose by an annualised rate of 12.5% in the third quarter leading to a 4.3% annual contraction. Economists polled by Reuters were expecting the data to show that the economy rose by 12.5% in Q3. Further data showed that the employment change in the third quarter dropped by 2.3%. Meanwhile, data by the ZEW Institute showed that the overall economic sentiment in Europe rose to 54.4 in December. In Germany, it rose by 55.0 from the previous 39.0 mostly because of the increased optimism about Brexit.
The British pound was little changed today as traders waited for more information about Brexit and the decision by the UK to administer the Covid vaccine. In a statement earlier today, Boris Johnson said that Brexit talks were extremely tricky. He also said that he was hopeful that the two sides would reach an agreement. He said that as he prepared to leave for Brussels where he will hold discussions with European leaders. Meanwhile, the UK became the first Western country to start Covid vaccinations. This process started less than a week after the country accepted the vaccine made by Pfizer and BioNTech.
The Japanese yen is little changed today after Japan’s Bureau of Statistics released an estimate for the country’s GDP data. The numbers showed that the country’s economy bounced back in the third quarter after contracting in the previous 3 quarters. In total, the economy grew at an annualised pace of 22.9%, better than the expected increase of 21.5%. It rose by 5.3% on a quarter-on-quarter basis. This increase was mostly because of a sharp increase in household spending and the rising external demand. Meanwhile, the debt-hungry Japanese government unveiled another $780 billion stimulus package, pushing the total amount spent to more than $3 trillion.
The EUR/USD pair is trading at 1.2120, which is where it started the day. On the four-hour chart, the price is slightly above the 28-day moving average and is along the 14-day EMA. It is also slightly above yesterday’s low of 1.2080. The DeMarker indicator, which is an important oscillator, has continued to drop. Therefore, with no major data from the United States scheduled for later today, the pair will possibly remain at the current level for the rest of the day.
The GBP/USD pair is little changed today as traders wait for more action on Brexit. It is trading at 1.3353, which is along the rising yellow trendline. It is also slightly below the 25-day and 15-day exponential moving averages while the Average True Range (ATR) indicator has been rising. The triple exponential average (TRIX), too, has moved below the zero line. Therefore, in the near term, the pair will remain at the current range as traders wait for more news on Brexit.
The GBP/CAD is trading at 1.7072 as traders wait for more information on Brexit and the Bank of Canada interest rate decision. On the four-hour chart, the pair is trading below the short and medium-term moving averages while the Average True Range (ATR) indicator has continued to rise. The on-balance volume too has started to drop. Therefore, the pair will likely remain volatile in the near term.