Forex - GBP/USD gains on U.K. retail data, U.S. fiscal jitters

The pound firmed against the dollar after U.K. industry data on retail sales beat expectations, while U.S. fiscal uncertainties repelled investors away from the greenback.

In U.S. trading on Wednesday, GBP/USD was trading at 1.6074, up 0.44%, up from a session low of 1.5980 and off from a high of 1.6082.

Cable was likely to find support at 1.5956, Tuesday's low, and resistance at 1.6163, the high from Sept. 18.

The pound saw support after the Confederation of British Industry reported that its retail sales index rose to 34.0 in September from 27.0 in August, the highest level since June 2012. Analysts were expecting the index to decline to 24.0.

Fiscal uncertainty in the U.S., meanwhile, pressured the dollar lower.

The House of Representatives recently approved legislation to fund government through Dec. 15, however, lawmakers also voted to defund President Barack Obama's healthcare bill, the Affordable Care Act.

While the bill faces little chance of survival, concerns that Democrats and Republicans will go back and forth crafting and rejecting spending proposals as the U.S. runs close to hitting its debt ceiling sent investors moving away from the greenback.

Failure to agree on a solution could result in a government shutdown in October.

Spotty data in the U.S. weakened the greenback by keeping investors unable to guess when the Federal Reserve will begin to taper the size or pace of its asset-purchasing program, which seeks to spur recovery by driving down interest rates and softens the greenback in the process.

In a report, the Census Bureau said that U.S. new home sales rose 7.9% to a seasonally adjusted 421,000 units in August from a downwardly revised 390,000 in July. Analysts were expecting new home sales to rise to 420,000 units last month. 

A separate report showed that U.S. core durable goods orders, excluding transportation items, fell 0.1% in August, disappointing expectations for a 1% increase, after an upwardly revised 0.5% contraction the previous month. 

Overall durable goods orders in the U.S. rose 0.1% last month, short of expectations for a 0.2% increase following a downwardly revised 8.1% decline in July.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.08% at 0.8412 and GBP/JPY up 0.20% at 158.36.

On Thursday, the U.K. is to produce a report on the current account, as well as revised data on second quarter economic growth.

The U.S. is to release the weekly report on initial jobless claims, as well as final data on second quarter growth and private sector data on pending home sales.