Investing.com - The pound trimmed losses against the U.S. dollar on Tuesday, as demand for the greenback weakened after data showed that manufacturing activity in the New York region fell more sharply than expected this month.
GBP/USD pulled away from 1.6656, the pair''s lowest since February 14, to hit 1.6713 during U.S. morning trade, still down 0.01%.
Cable was likely to find support at 1.6600, the low of February 13 and resistance at 1.6823, Monday''s high.
The Federal Reserve Bank of New York said that its general business conditions index came in at 4.48 this month, down from a 20-month high of 12.51 in December. Analysts had expected the index to decline to 9.00.
The new orders index fell to zero from a two-year high of 11 last month.
A series of soft U.S. economic data has prompted some investors to wonder whether the Federal Reserve will slow the pace of reductions to its asset-buying stimulus program.
Earlier in the day, the Office for National Statistics said U.K. consumer price inflation accelerated at a rate of 1.9% last month, down from 2.0% in December. Analysts had expected consumer price inflation to remain unchanged last month.
Consumer prices fell 0.6% in January from a month earlier, compared to expectations for a decline of 0.5%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 1.6% in January, slowing from 1.7% in December. Analysts had expected an increase to 1.9%.
The retail price index rose 2.8% last month, up from 2.7% in November, the ONS said.
The data also showed that the house price index climbed 5.5%, below expectations for a 5.8% gain, up from a 5.4% increase in December.
The data reinforced the view that the Bank of England is unlikely to raise interest rates any time soon, despite the stronger economic outlook.
Sterling was lower against the euro, with EUR/GBP rising 0.41% to 0.8234.
Also Tuesday, German economic sentiment deteriorated slightly in February, as concerns that the economic recovery in the U.S. could lose momentum weighed.
The ZEW Centre for Economic Research said that its index of German economic sentiment came in at 55.7 this month, down from 61.7 in January. Analysts had expected an unchanged reading.