The pound edged lower against the U.S. dollar on Friday, after disappointing U.K. mortgage approvals data, but sterling remained within close distance of a 29-month high as expectations for the Bank of England to raise interest rates sooner than expected supported.
Cable was likely to find support at 1.6475, the low of December 31 and resistance at 1.6725.GBP/USD hit 1.6607 during European morning trade, the session low; the pair subsequently consolidated at 1.6626, edging down 0.07%.
In a report, the British Bankers' Association said mortgage approvals rose by GBP46,500 in December, less than the expected 47,200 increase, after an upwardly revised 45,400 rise the previous months.
Demand for the pound still remained supported after data on Wednesday showed that the rate of unemployment in the U.K. fell to 7.1% in the three months to November, to stand just above the 7% level the BoE has said is its threshold for considering raising interest rates from their current record low of 0.5%.
But the minutes of the BoE’s January meeting, also published on Wednesday, stressed that the bank is in no rush to act.
Sterling was fractionally higher against the euro, with EUR/GBP easing 0.07% to 0.8226.
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