Forexpros – The pound remained lower against the U.S. dollar on Tuesday, following the release of mixed U.S. housing data, but diminished expectations for another round of easing by the Bank of England lent support.
GBP/USD hit 1.5832 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5846, shedding 0.29%.
Cable was likely to find short-term support at 1.5820, Monday’s low and resistance at 1.5913, Monday’s high and a two-week high.
The Commerce Department said U.S. housing starts fell in February, but the number of building permits issued rose to the highest level since October 2008.
U.S. housing starts declined 1.1% last month to a seasonally adjusted 0.70 million from a revised 0.71 million units in January. Economists had forecast housing starts little changed at a 0.70 million-unit rate.
Building permits jumped 5.1% to a seasonally adjusted 0.72 million, above expectations for a modest 0.6% gain to 0.69 million.
The report showed that permits to build single-family homes jumped 4.9% to a 472,000-unit pace, the highest since April 2010.
Earlier Tuesday, the Confederation of British Industry said industrial order expectations declined more-than-expected in March, easing off the previous month’s six-month high.
But sterling remained supported after official data showed that the annual rate of consumer price inflation in the U.K. eased to the lowest since November 2010 in February, dampening expectations for a fresh round of easing measures by the BoE.
The Office for National Statistics said annual rate of consumer price inflation decelerated to 3.4% last month from 3.6% in January, in line with market expectations.
Core CPI, which excludes volatile food and energy costs fell to 2.4% in February, the lowest level since November 2009.
The BoE has forecast that inflation will fall below its 2% target by the end of 2012.
But demand for higher-yielding assets remained subdued amid fresh worries over a slowdown in the world’s second largest economy, after global miner BHP Billiton said earlier that Chinese demand for iron ore is slackening.
The pound was fractionally higher against the euro, with EUR/GBP dipping 0.08% to hit 0.8324.
Later in the day, Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington; his comments would be closely watched.
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