The pound was little changed against the U.S. dollar on Tuesday, as trading volumes remained light ahead of the Christmas holiday.
GBP/USD inched up 0.05% to trade at 1.6365 during U.S. morning trade. Cable was likely to find support at 1.6314, the low of December 20 and resistance at 1.6394, the high of December 19.
Demand for the greenback remained supported amid indications of an improving U.S. economy. The Commerce Department said new home sales fell by 2.1% to a seasonally adjusted 464,000 units in November, compared to expectations for a decline to 445,000. New home sales for October rose by 474,000 units.
The housing report came after data showed that total U.S. durable goods orders increased by 3.5% in November, easily surpassing expectations for a 2% gain. Core durable goods orders, excluding volatile transportation items, climbed by a seasonally adjusted 1.2% in November, above forecasts for a 0.6% increase.
Orders for core capital goods, a key barometer of private-sector business investment, surged 4.5% last month, blowing past expectations for a 0.7% gain. Shipments of core capital goods, a category used to calculate quarterly economic growth, advanced 2.8% in November, significantly higher than expectations for a 1% gain.
The upbeat data added to the view that the U.S. economy will be strong enough to allow the Federal Reserve to continue withdrawing stimulus through 2014.
Sterling was also higher against the euro, with EUR/GBP slipping 0.27% to 0.8351. Mortgage approvals in the U.K. rose more-than-expected in November to hit the highest level since December 2009, according to the British Banker''s Association.
Meanwhile, official data released earlier showed that consumer spending in France rose 1.4% in November, the first increase in four months and easily surpassing expectations for a 0.4% gain.
Separate data confirmed that France’s economy grew 0.1% in the third quarter, while the second quarter figure was revised up to a 0.6% gain from a previous estimate of 0.5%.
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