Investing.com - The pound rose to fresh six-year highs against the U.S. dollar on Monday, after the release of mixed U.S. data as expectations for a U.K. rate hike in the second half of this year continued to support demand for sterling.
GBP/USD hit 1.7072 during U.S. morning trade, the pair\''s highest since June 20; the pair subsequently consolidated at 1.7067, adding 0.18%.
Cable was likely to find support at 1.7007, the low of June 27 and resistance at 1.7072.
The National Association of Realtors said U.S. pending home sales rose 6.1% last month, easily surpassing expectations for a 1.5% gain. Pending home sales in April rose by 0.5%.
A separate report showed that the Chicago purchasing managers’ index slumped to 62.6 this month from a reading of 65.5 in May. Analysts had expected the index to decline to 63.0 in June.
Meanwhile, the pound remained supported after data on Friday confirmed that the U.K. economy expanded by 0.8% in the first three months of 2014. The economy grew at an annual rate of 3.0% in the first quarter, the fastest since 2007.
Earlier Friday, Bank of England Governor Mark Carney indicated that rates were unlikely to return to their pre-crisis levels of 5%, but instead could be expected to rise to around 2.5% by the first quarter of 2017.
The BoE announced a new affordability test on banks and a cap on home loans on Thursday, in a bid to prevent the housing market from destabilizing the U.K. economy.
Demand for sterling continued to be underpinned as the new measures did little to alter expectations that the BoE will raise interest rates ahead of other central banks.
Sterling was steady against the euro, with EUR/GBP dipping 0.01% to 0.8007.
In the euro zone, data showed that consumer price inflation increased by 0.5% this month, in line with expectations and unchanged from May.
The rate remains well below the European Central Bank''s target of near but just under 2%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 0.8% in June, accelerating from 0.7% in May and above expectations for a reading of 0.7%.