The pound touched session highs against the dollar on Wednesday after data confirmed that the rate of fourth quarter economic growth in the U.K. was unrevised at 0.7%, but the annual rate of growth was revised slightly lower.
Pound edges higher against dollar after U.K. GDP report
GBP/USD hit highs of 1.6710 and was last up 0.04% to 1.6688.
Cable was likely to find support at 1.6610, the low of February 21 and resistance at 1.6740, the high of February 18.
The Office for National Statistics said gross domestic product increased by 0.7% in the three months to December, unrevised from the preliminary estimate and in line with forecasts.
On a year-over-year basis, the U.K. economy expanded by 2.7% in the fourth quarter, down slightly from the preliminary estimate for 2.8% growth.
The largest contributors to fourth quarter growth were household spending, business investment and net trade, the ONS said. Business investments were revised up to growth of 8.7% from the same period a year earlier.
The pound’s gains were held in check after two members of the Bank of England’s monetary policy committee reiterated Wednesday that the bank is planning to keep rates on hold for some time.
David Miles said recent falls in inflation meant there was less pressure to raise borrowing costs, while the bank’s chief economist Spenser Dale said it was not planning to raise rates any time soon.
Sterling was fractionally higher against the euro, with EUR/GBP dipping 0.06% to 0.8233.
Overall market sentiment remained subdued following a disappointing reading on U.S. consumer sentiment on Tuesday, which fuelled concerns over the strength of the economic recovery.
Speculation that Ukraine could default on its loans, if an aid package can’t be agreed also weighed on sentiment. Earlier in the week, Russia's deputy finance minister said Moscow was under no legal obligation to give Ukraine the remainder of a $15 billion bailout package it negotiated in December.
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