INV: Dollar remains broadly lower after upbeat U.S. GDP
Investing.com - The dollar remained broadly lower against the other major currencies on Tuesday, as the release of better than expected first-quarter U.S. economic growth data helped boost demand for riskier assets.
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 1.18% at 1.3380, 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 0.46% to 1.1077, pulling further away Friday’s three-month trough of 1.0908, while EUR/GBP declined 0.70% to 0.8277, still close to Monday’s two-year peak of 0.8378.
USD/JPY rose 0.35% to 102.35, after falling to lows of 99.15 on Friday, the weakest level since November 2013, while USD/CHF held steady at 0.9780.
The Australian and New Zealand dollars remained stronger, with AUD/USD up 0.96% at 0.7399 and with NZD/USD jumping 1.13% to 0.7074.
Elsewhere, USD/CAD slid 0.31% to 1.3029.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.53% at 96.04, off the previous session’s three-month highs of 96.86.
