iFOREX Daily Analysis : June 29, 2016

 | Jun 29, 2016 04:42AM ET

The dollar recovered slightly from losses against 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. 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%. Global stock markets suffered the largest two-day drop 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. For today, in the euro zone, Germany and Spain are to produce initial estimates on consumer inflation. The U.K. is to release data on net lending. The U.S. is to report on personal income and spending and pending home sales. Fed Chair Janet Yellen and other central bank heads are to attend the ECB central bank conference in Portugal. Investors also turn their attention to a closely-watched two-day EU Summit in Brussels for clearer indications on the timing of Britain's exit from the European bloc.

EUR/USD

Despite a slight recovery in the dollar, the euro moved higher on Tuesday with top leaders from throughout the euro area appear to be adopting a hard-line stance against the U.K rejecting a proposal which would enable Britain to receive access to the European single market. In the U.S., the release of better than expected first-quarter U.S. economic growth data helped boost demand for riskier assets even though real consumer spending for the first three months of the year was revised down. For today, in the euro zone, Germany and Spain are to produce initial estimates on consumer inflation, the U.S. is to report on personal income and spending and pending home sales. Fed Chair Janet Yellen and other central bank heads are to attend the ECB central bank conference in Portugal.