Investing.com - The dollar pared losses against the other major currencies on Tuesday, as the release of upbeat U.S. data boosted optimism over the strength of the economy, lending support to the greenback.
The Conference Board said its index of consumer confidence rose to 98.0 this month from a reading of 92.4 in May, whose figure was revised from a previously reported 92.6. Analysts had expected the index to increase to 93.3 in June.
The report came after the third estimate of first quarter U.S. growth domestic product showed growth of 1.1%, revised up from the initial reading of a 0.8% rise. Analysts had expected growth to settle at 1.0%.
However, real consumer spending for the first three months of the year was revised down to 1.5%, from the prior reading of 1.9%. Economists had forecast an upward revision to 2.0%
GBP/USD was up 0.91% at 1.3345, off the 31-year low of 1.3122 set on Monday, a level not seen since 1985. The two-day selloff in sterling seen on Friday and Monday was the largest in recent history.
Global stock markets suffered the largest two-day rout ever, as a wave of selling wiped around $3 trillion from markets.
Ratings agencies Standard & Poor’s and Fitch Ratings both downgraded their credit ratings for the U.K. on Monday and warned that further cuts are possible.
S&P, the only major ratings agency to maintain a Triple A rating for the U.K., cut its rating by two notches to AA, warning that Brexit posed a risk to the constitutional and economic integrity of the U.K.
Fitch lowered its rating from AA+ to AA, forecasting an "abrupt slowdown" in growth in the short-term.
U.K. Prime Minister David Cameron was to travel to Brussels later Tuesday to discuss the Brexit vote with EU leaders.
EUR/USD gained 0.34% to 1.1063, pulling further away Friday’s three-month trough of 1.0908, while EUR/GBP declined 0.55% to 0.8290, still close to Monday’s two-year peak of 0.8378.
USD/JPY climbed 0.68% to 102.69, after falling to lows of 99.15 on Friday, the weakest level since November 2013, while USD/CHF added 0.13% to 0.9797.
The Australian and New Zealand dollars remained stronger, with AUD/USD up 0.71% at 0.7381 and with NZD/USD advancng 0.79% to 0.7051.
Elsewhere, USD/CAD was little changed at 1.3068.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.31% at 96.25, off session lows of 95.93 and close to the previous session’s three-month highs of 96.86.