Black Friday Purchases Soar As GBP Looks To Continue Its Run Of Form

Hello, and welcome. If like many shoppers you started your Christmas shopping early during the Black Friday sales this weekend in London, then you may have found yourself rubbing your eyes in disbelief as HMV’s flagship Oxford Street Store has reappeared in the capital. Like the UK’s current economic outlook, the business has seen a U-turn after falling into administration back in 2018. Whilst it has also gone through a rollercoaster ride of performance over the past few years, it remained resilient in the tough climate and now appears to be looking healthier in the lead-up to the new year. This level of resilience was also felt by the US consumer market over the weekend as Black Friday Shoppers spent a record $9.8bn, which was a 7.5% increase from the previous year.

However, despite all that spending, the US dollar continues to endure weakness, particularly against the likes of GBP and EUR. So has the greenback's time at the top ended?

As another month comes to an end, the final week still has scope for some volatility as we see key economic data from the US and European communities. Tuesday is US focused with the likes of Consumer Confidence and Richmond Manufacturing Index; both are forecast to come in lower than the previous month's figures. Any improvements versus consensus may give some help to the dollar. Coming into Wednesday, our initial attention will be to the Eurozone’s larger members Germany and Spain with their CPI data.

Any improvements to their inflation figures will be well received by the ECB as they continue to work towards their 2% target level. The afternoon session will turn to the US’s GDP figure, which is forecast to post further growth from previous levels. Any signs of Economic improvements for the US will help the US dollar potentially halt further weakness. Thursday again starts off as European focused with key data out in the guise of Core CPI and Unemployment claims. With CPI expected to fall again from the previous month, this will certainly ensure that the ECB remains on schedule for their expected target level completion.?The afternoon session will help highlight the US’s current labour market conditions, particularly as the consensus is for claims to increase. Friday, all eyes are on manufacturing for the EC/UK and US as the ever-contracting industry continues to battle its way back to being above the 50 benchmark. All current forecasts are poised to be disappointing.

Circling back to the beginning of the week and GBP continues its fine run of form, with GBP/USD now pushing comfortably above 1.26 levels. Whilst GBP/EUR also rebounded during the back part of last week and has managed to stabilise above the 1.15 over the course of the weekend and into today. ?

So, the question I leave you with is: Can GBP continue its drive higher this week or will it finally be stopped in its tracks?

Current Rate & Technical Levels

Relevant Economic Events

What we are reading

Check out some of the articles the team has been reading this week:

• CNBC - Black Friday shoppers spent a record $9.8 billion in U.S. online sales, up 7.5% from last year (Read)
• SkyNews - HMV relaunch of Oxford Street branch a 'great moment' in chain's recovery (Read)
• BBC - Sunak welcomes foreign firms' ￡29.5bn 'vote of confidence' (Read)
• Reuters - Global economy to slow down but likely avoid recession in 2024 (Read)

Thank you for reading! We'll be back next week with another edition. This edition of Birchstone: The Weekly View was written by Portfolio Manager Jamie Lewis .