Forexpros – The pound remained lower against the U.S. dollar on Wednesday, following the release of positive U.S. economic reports as skepticism over the outcome of this week’s highly anticipated European summit continued to dominate market sentiment.
GBP/USD hit 1.5546 during U.S. morning trade, the pair’s lowest since June 25; the pair subsequently consolidated at 1.5565, dropping 0.50%.
Cable was likely to find support at 1.5503, the low of June 16 and resistance at 1.5649, Tuesday’s high.
A report by the National Association of Realtors showed that pending home sales jumped 5.9% in May, blowing past expectations for a 1% increase, to match a two-year high hit in March.
The report came after official data showed that U.S. durable goods orders rose 1.1% in May, beating expectations for a 0.4% increase, indicating that the manufacturing sector is stabilizing following a 0.2% drop in May.
However, core durable goods orders, which exclude transportation items, rose 0.4% in May, missing expectations for a 0.7% gain.
Meanwhile, investors remained cautious ahead of the EU summit on Thursday and Friday amid growing doubts that leaders would make progress on greater fiscal integration and allowing the bloc’s rescue funds to buy government debt.
Sentiment on the pound was also weighed by mounting speculation that the Bank of England will implement fresh quantitative easing measures to shore up growth.
On Tuesday, BoE governor Mervyn King the outlook for the U.K. economy had deteriorated in recent weeks as a result of the ongoing euro zone crisis, and added that an interest rate cut would be less effective in stimulating the economy than more easing.
Elsewhere, the pound was lower against the euro with EUR/GBP rising 0.24%, to hit 0.8007.
Also Wednesday, industry data showed that U.K. mortgage approvals fell to 30,200 in May, the lowest level since April 2011, from 32,100 the previous month, disappointing expectations for a 32,800 rise.
A separate report showed that an index of realized sales in the U.K. rose unexpectedly to 42 in June from a reading of 21 the previous month.
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