GBPUSD edges higher on US holiday

You may not have noticed it; after all, it has barely been mentioned on TV or the Internet, but yesterday was Thanksgiving Day in the US and today is the curiously named Black Friday. I saw a quote yesterday about how ironic it is that America has a day to give thanks for everything they have and then a day to blitz money on new stuff. Nevertheless, the US markets are sparsely attended and very thinly traded on these two days. Amidst a lack of US traders, the US dollar has slipped a little. Three GBP/USD rate is partially improved by better than expected UK purchasing managers indices. In fact, both the service sector and the composite PMI’s steps above the 50 level, into positive territory for the first time in several months. Hence the GBP/USD rate is pushing up to $1.2550 again and the GBP/EUR rate is trying to get above €1.15. That attempt may be stymied by this morning’s German data from the ifo Institute Which is forecast to show a little more confidence in German businesses. That will play out from 9:00 AM onwards.

Germany’s economy continues to contract

In data released early this morning, we discovered that the German economy contracted by 0.4% in the year to September, the second quarterly contraction in a row and the continuation of a downward trend which began in early 2022. With Germany being the powerhouse of European manufacturing and consumption, this should greatly concern the European Central Bank as they grapple with the task of managing inflation without killing the growth which looks very fragile. The GBP/EUR exchange rate has moved up to €1.15 but hasn’t broken above that level yet. The EUR/USD rate is benefiting from a lack of US traders and this pair is up above $1.0910 this morning. We lack UK and U.S. data today, so sideways trading into the weekend would seem the most likely scenario.