The U.S. dollar fell against the British pound on Tuesday, the first time since Britain' s vote to leave the European Union, as investor appetite for riskier assets recovered and demand for the greenback diminished.
Euro and Sterling suffered heavy losses in the previous two sessions, as the result of Britain' s referendum on Friday spurred great concerns on the economic stability of the UK and Euro area.
The Sterling recovered 0.9 percent against the greenback in late trading on Tuesday, as European Union leaders gathered in Brussels for a two-day meeting to discuss Britain' s decision to leave the bloc, raising speculations that policy makers may take measures to limit the economic fallout.
The U.S. dollar slipped against most major currencies on Tuesday. The dollar index, which tracks the greenback against six major peers, was down 0.25 percent at 96.301 in late trading.
In late New York trading, the euro rose to 1.1046 dollars from 1.1019 dollars of the previous session, and the British pound increased to 1.3321 dollars from 1.3192 dollars. The Australian dollar went up to 0.7361 dollars from 0.7343 dollars.
The dollar bought 102.77 Japanese yen, higher than 101.99 yen of the previous session. The dollar rose to 0.9832 Swiss francs from 0.9776 Swiss francs, and it dipped to 1.3061 Canadian dollars from 1.3092 Canadian dollars.
U.S. economic growth slowed in the first quarter but not as sharply as previously estimated, and while there are signs of a pickup in the second quarter, analysts worry Britain's vote to leave the European Union could hurt activity later this year.
Gross domestic product increased at a 1.1 percent annual rate, rather than the 0.8 percent pace reported last month, the Commerce Department said on Tuesday in its third GDP estimate. The economy grew at a rate of 1.4 percent in the fourth quarter.
Britain's vote to leave the European Union could pose a new drag on the U.S. economy at a time when momentum in the U.S. job market may already by slowing, Federal Reserve governor Jerome Powell said on Tuesday.
In the first of Fed policymakers to comment since the shock vote in Britain last week, Powell said the Brexit referendum had shifted global risks "to the downside," potentially posing a new threat to the Fed's outlook.
European leaders told Britain on Tuesday to act quickly to resolve the political and economic confusion unleashed by its vote to leave the European Union last week, after the IMF said the uncertainty could put pressure on global economic growth.
Sterling and world stock markets recovered slightly on Tuesday but investor confidence remains fragile despite policymakers saying they will take all necessary measures to protect their economies.
European countries are concerned about the impact of the political and regulatory uncertainty on the economies of the other 27 other EU members while the UK government works out how and when to begin withdrawal negotiations under Article 50 of the Lisbon Treaty.
European Central Bank President Mario Draghi said on Tuesday that central banks around the world should aim to align monetary policies to mitigate "destabilizing spillovers" between economies.
Draghi had added that he agreed with private economists who predict euro zone growth will be reduced by up to 0.5 percent cumulatively over the next three years due to the "Brexit" vote.
At a summit meeting of the leaders of the 28 members of the EU in Brussels on Tuesday, Cameron said he hoped the UK would maintain as tight an economic and political relationship as possible with the EU.
"Britain will be leaving the European Union but we will not be turning our back on Europe," he told a news conference after a dinner at which he said many European partners expressed regret and voiced friendship for Britain.
Oil futures finished higher for the first time in three sessions on Tuesday, rebounding from a Brexit-fueled selloff that sent crude futures to a seven-week low on concerns of a slowdown in the global economy.
August West Texas Intermediate crude CLQ6, +1.00% climbed $1.52, or 3.3%, to settle at $47.85 a barrel on the New York Mercantile Exchange, while August Brent crude LCOQ6, +0.74% gained $1.42, or 3%, to $48.58 a barrel.
Three suicide bombers opened fire before blowing themselves up in the main international airport in Istanbul on Tuesday, killing 31 people and wounding close to 150, officials said.
Reference: Reuters, Xinhua, Market Watch
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