The sterling rose today after the Office of National Statistics (ONS) released the country’s GDP number for the third quarter. In the quarter, the economy rose by an annualized rate of 1.1%. This was better than the consensus estimates of 0.9%. On a QoQ basis, the economy expanded by 0.3%, which was better than the consensus estimates of a 0.1% increase. Construction output increased by 2.4% in August after increasing by 1.9% in July. On a MoM basis, the construction output increased by 0.2%. On the negative side, manufacturing production declined by -1.7% on an annual basis and by -0.7% on a monthly basis. Industrial production declined by an annualized rate of -1.8%, which was lower than the previous decline of -1.1%.
The euro rose sharply even as German exports tumbled in August. Numbers from the German statistics office showed that exports declined by -1.8% in August. This was lower than the previous gain of 0.8%. Imports increased by 0.5% after declining by 2.4% in July. In Sweden, the CPI increased by an annualized rate of 1.5% and on a MoM rate of 0.5%. These were better than the 1.4% increase and a -0.4% decrease in the previous month. Meanwhile, the ECB published its accounts of the monetary policy meeting held late last month. In the meeting, the bank decided to slash rates by 10 basis points and restart quantitative easing in November this year.
The US dollar weakened after a series of weak numbers from the US. In September, the headline CPI remained unchanged at 1.7%. This was lower than the consensus estimates of 1.8%. On a MoM basis, the CPI was unchanged. The core CPI, which excludes volatile products remained unchanged at 2.4%. On a MoM basis, it declined to 0.1% from the previous 0.3%. Meanwhile, the initial jobless claims declined by 210k, which was better than the previous 220k. The continuing jobless claims increased to 1,684k in the week. Real earnings in September contracted by -0.1%.
The GBP/USD pair rose today to an intraday high of 1.2264. On the hourly chart, this price was above the monthly low of 1.2195. The price was also along the upper line of the Bollinger Bands and below the 23.6% Fibonacci Retracement level. The RSI has been moving up as well. As of writing, the RSI has moved to a high of 60. The pair is likely to continue being volatile thanks to ongoing Brexit issues.
The EUR/GBP pair continued the upward trend started on September 20. The pair reached a high of 0.9000, which is an important psychological level. On the four-hour chart, the pair is trading above the 38.2% Fibonacci Retracement level. The price is slightly above the 14-day and 28-day moving averages. The RSI has reached the overbought level. The momentum indicator has reached above 100 level. The pair will likely continue moving upwards.
The EUR/USD pair rose today to a high of 1.1033. This was higher than the important resistance level of 1.1000. On the hourly chart, this increase was a breakout from a channel that had formed in the past few days. On the hourly chart, the price is above the 14-day and 28-day moving averages. The RSI has moved above the overbought level of 70. There is a likelihood that the pair will return to the previous channel before it restarts its upward trend.
General Risk Warning for FX & CFD Trading. FX & CFDs are leveraged products. Trading in FX & CFDs related to foreign exchange, commodities, financial indices and other underlying variables, carry a high level of risk and can result in the loss of all of your investment. As such, FX & CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with FX & CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to FX or CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.