Investing.com - The pound fell against the dollar on Thursday after solid U.S. home sales and manufacturing activity numbers sparked demand for the greenback due to sentiments the days of ultra-loose monetary policy in the U.S. are coming to an end.
In U.S. trading on Thursday, GBP/USD was trading at 1.6858, down 0.25%, up from a session low of 1.6852 and off a high of 1.6917.
Cable was likely to find support at 1.6802, Tuesday''s low, and resistance at 1.6921, Wednesday''s high.
The National Association of Realtors reported earlier that U.S. existing home sales increased 1.3% in April to an annual rate of 4.65 million units.
Analysts were expecting existing home sales to rise 2.2% to 4.68 million last month, however, April''s increase indicated that the housing market continues to improve, which supported the dollar.
A separate report showed that U.S. manufacturing activity expanded at a faster rate than expected this month. London-based Markit Economics reported earlier that its preliminary U.S. manufacturing purchasing managers'' index rose to 56.2 from a final reading of 55.4 in April, beating expectations of 55.5.
The data came after the Labor Department reported that the number of individuals filing for initial jobless benefits last week increased by 28,000 to 326,000 from the previous week’s revised total of 298,000. Analysts had expected jobless claims to rise by 12,000 to 310,000, though markets shrugged off the numbers.
On Wednesday, the Federal Reserve released the minutes of its April policy meeting, which revealed the U.S. central bank plans to continue tapering its monthly bond-buying program and rely on other tools to normalize monetary policy, though actual rate hikes won''t come for a considerable amount of time.
Since the 2008 financial crisis, the Fed has snapped up trillions of dollars in bonds from banks to spur recovery by suppressing long-term interest rates, weakening the dollar in the process.
Elsewhere a preliminary reading of China’s HSBC manufacturing index rose to a five-month high of 49.7, beating expectations for a 48.1 reading, though the figure still remained below the 50 mark separating contraction from expansion
Meanwhile, the pound fell after data on Thursday confirmed that the U.K. economy grew 0.8% in the first quarter of the year from the previous quarter and 3.1% on year, disappointing some market expectations for upward revisions.
Elsewhere, sterling was flat against the euro, with EUR/GBP up 0.01% at 0.8098, and up against the yen, with GBP/JPY up 0.12% at 171.55.
On Friday, the U.S. is to release data on new homes sales.