- Pound (GBP) is modestly lower after gains yesterday
- UK consumers reined in spending ahead of December
- Euro (EUR) is a touch higher
- Greenland worries remain amid a quiet economic calendar
The Pound-Euro (GBP/EUR) exchange rate is modestly lower after yesterday’s rise. The pair rose 0.178% in the previous session, settling on Monday at €1.1538. It traded between €1.1503 and €1.1559. At 17:30 UTC on Tuesday, GBP/EUR trades 0.02% lower at €1.1536.
The pound is modestly lower on Tuesday amid signs of cautious consumer spending. According to Barclays data, British consumers slowed their spending in December by the most in almost five years, adding to signs of household caution in the run-up to Christmas.
Barclays said April consumer card spending fell 1.7% in December from the same month in 2020 for the largest such drop since the 12 months to February 2021 in the COVID pandemic.
Meanwhile, separate figures from the British Retail Consortium painted a weak picture with sales growth among retailers slowing for a fourth straight month in December as shoppers held out for post-Christmas discounts.
Households became cautious about their spending at the end of last year, citing concerns about tax increases, inflation, and a weakening labor market. Attention now turns to GDP figures due tomorrow.
The EUR is unchanged amid a quiet day on the economic calendar, indicating the currency lacks a fresh catalyst.
Investors are taking recent Trump threats over Greenland in their stride. Trump has doubled down on his plans to take over Greenland, saying that the US must own Greenland, an autonomous part of the Kingdom of Denmark, to prevent Russia or China from occupying the strategically located and mineral-rich Arctic territory.
Denmark and the US, both NATO members, are due to meet this week to discuss Greenland. Greenland and Denmark have said that Greenland is not for sale, but Trump has not ruled out taking it by force.
The markets will continue watching developments. Any indication that the US is considering taking Greenland could push the Danish krone and the euro lower.
