The pound was steady at one-and-a-half month lows against the broadly stronger dollar on Wednesday, amid growing confidence in the U.S. recovery as investors awaited a preliminary report on U.S. second quarter growth and the outcome of the Federal Reserve’s latest policy meeting later in the day.
GBP/USD dipped 0.04% to trade at 1.6937, the weakest level since June 18.
Cable was likely to find support at around 1.6800 and resistance at the 1.6900 level.
The U.S. was to release the preliminary estimate on second quarter gross domestic product growth later Wednesday, which was to be followed by the conclusion of the Fed’s latest policy meeting later in the day.
Investors were also awaiting the U.S. nonfarm payrolls report for July on Friday.
The dollar has strengthened since Fed Chair Janet Yellen said earlier this month that interest rates could rise sooner if the recovery in the labor market continued.
The greenback received an additional boost in recent sessions as economic data indicated that the recovery is gaining traction. A report by the Commerce Board on Tuesday showed that U.S. consumer confidence rose to the highest level in seven years this month.
Elsewhere, sterling was almost unchanged against the euro, with EUR/GBP at 0.7911, holding above the 22 month lows of 0.7873 reached last Wednesday.
The euro remained under heavy selling pressure amid concerns over the divergence in monetary policy between the European Central Bank and its major peers.
Data on Wednesday showed that Spain’s economy grew by a stronger than forecast 0.6% in the second quarter of 2014, and expanded 1.2% on a year-over-year basis.
But a separate report showed that consumer inflation in Spain fell 0.6% in July, underling concerns over the threat of deflationary pressures in the euro area.
The euro zone was to release what would be closely watched data on consumer prices on Thursday.