By CHRIS ILLING
CCO at ActivTrades Corp
Black Friday is behind us. But the rise of online shopping has reduced the importance of Black Friday as a single day event. What originally started in the US has become a global event.
In the US alone, a record 130.7m people are expected to shop in stores and online.
With many consumers squeezed by persistent inflation and high interest rates, US holiday spending is expected to rise at the slowest pace in five years. Retailers will likely continue to discount throughout the season to avoid inventory gluts at year-end. Most major retailers are hiring less seasonal workers for the upcoming holiday season.
The US stock markets barely moved on the ‘Black Friday’ sales day. After the Thanksgiving holiday break, business remained quiet on the shortened trading day but, overall for November, global equities are drifting toward their biggest one-month rally since November 2020.
Bitcoin also reached its highest level since May 2022, and was traded above $38,000 briefly. The common belief that the major central banks may have reached the end of their interest rate hikes is also fuelling the spike. In particular, the US Federal Reserve is currently showing no signs of continuing its inflation fight with further interest rate tightening. The development benefits risky assets, such as digital currencies, because interest-bearing securities such as government bonds do not become more lucrative in an environment of stable interest rates.
In comparison to Bitcoin, the US Dollar had a weaker month against other major currencies. Overall, the US Dollar Index was slightly weaker over the course of last week and maintains a generally weak undertone. On October 25, 2023, the Euro to US dollar exchange rate was at 1.053 and, a month later on November 24, was traded at 1.094.
Purchasing Managers’ Index data (PMI) from Europe and the UK was better than expected, and experts now hope that economic activity in the Euro-zone is tilting less to the downside than before.
However, there is some data coming up in the form of the S&P Global PMI data for the US. The preliminary November data is expected to reflect some slowdown in US activity. The manufacturing index could fall slightly, while the services and composites readings are likely to reflect a slower expansion. Weak – or weaker-than-expected – data could hurt the US dollar further.
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