Forex - GBP/USD hovers lower in choppy trading, U.S. data weigh

The pound weakened against the dollar in choppy trading on Thursday after better-than-expected regional factory data in the U.S. fanned already growing expectations that monetary stimulus programs will fade out soon and allow the greenback to strengthen over the long term.

Monetary stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling can strengthen the U.S. currency.

In U.S. trading on Thursday, GBP/USD was trading at 1.5474, down 0.07%, up from a session low of 1.5415 and off from a high of 1.5494.

Cable was likely to find support at 1.5415, the earlier low, and resistance at 1.5494, the earlier high.

Federal Reserve Chairman Ben Bernanke has said monetary stimulus programs, which weaken the dollar to spur recovery, may scale back this year if the economy improves, and data released earlier Thursday pointed to a U.S. economy that is on the mend.

The Federal Reserve Bank of Philadelphia said earlier that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to 354,000 compared to expectations for an increase of 4,000 to 340,000, though the numbers failed to seriously halt the dollar's advance.

Better-than-expected retail sales data out of the U.K. cushioned Cable's losses.

The Office for National Statistics said earlier that U.K. retail sales climbed 2.1% in May, surpassing expectations for a gain of 0.8% after falling 1.1% in April, the largest drop in a year.

Retail sales were 1.9% higher from a year earlier, compared to expectations for a 0.2% increase.

The ONS said food sales rose 3.5% in May, the largest increase in two years, while non-store retailing, including online sales, was up 4.3%.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP trading down 0.52% at 0.8541 and GBP/JPY up 1.24% at 151.21.

On Friday, the U.K. is to release official data on public-sector net borrowing.