Investing.com - The pound dropped to more than one-month lows against the U.S. dollar on Tuesday, as the greenback remained supported after the release of strong U.S. consumer confidence data and ahead the Federal Reserve's monthly policy statement.
GBP/USD hit 1.6936 during U.S. morning trade, the pair's lowest since June 18; the pair subsequently consolidated at 1.6938, sliding 0.27%.
Cable was likely to find support at 1.6866, the low of May 6 and resistance at 1.7001, Monday's high.
The Conference Board said its index of consumer confidence rose to a seven-year high of 90.9 this month from a reading of 86.4 in June, whose figure was revised up from a previously reported 85.2. Analysts expected the index to decline to 85.3 in July.
Demand for the dollar also remained supported ahead of preliminary data on U.S. second-quarter growth and the Federal Reserve’s latest rate statement, both due on Wednesday. Investors were also awaiting the July employment report on Friday.
Earlier this month Fed Chair Janet Yellen said that rates could rise sooner if the recovery in the labor market continued.
In the U.K., official data showed that net lending to individuals rose by £2.5 billion last month, below expectations for an increase of £2.6 billion. Net lending to individuals in May was revised up to a £3.0 billion increase from a previously estimated £2.7 billion gain.
Sterling was lower against the euro, with EUR/GBP adding 0.08% to 0.7918.
The single currency remained under pressure amid concerns over the divergence in monetary policy between the European Central Bank and its major peers.
The euro zone was to release what would be closely watched data on consumer prices on Thursday, amid concerns over persistently low levels of inflation in the currency bloc.