Investing.com - The pound edged lower against the dollar on Tuesday, pulling back from four-and-a-half year highs, after data showed that the U.K. economy grew slightly less than forecast in the first three months of the year.
GBP/USD dipped 0.05% to 1.6798 from 1.6839 ahead of the data. On Monday the pair rose to four-and-a-half year peaks of 1.6856.
Cable was likely to find support at 1.6760 and resistance at 1.6856.
Sterling edged lower after the Office of National Statistics reported that the U.K. economy grew 0.8% in the first quarter, bringing the annual rate of growth to 3.1%, the fastest rate of annual growth since the fourth quarter of 2007.
Market expectations had been for quarterly growth of 0.9% and an annual expansion of 3.2%.
In the previous quarter, gross domestic product grew by 0.7%.
The U.K.’s dominant service sector grew 0.9% during the quarter, the ONS said, while manufacturing output rose 1.3% and construction output grew 0.3%.
Earlier Tuesday, Bank of England Governor Mark Carney said the U.K. recovery is starting to “broaden”, but added that the bank still sees plenty of slack in the labor market.
Recent upbeat data has fuelled expectations that the BoE could raise interest rates in the early part of next year, propelling sterling to multi-year highs against the dollar.
Elsewhere, the pound fell to two-week lows against the euro, with EUR/GBP rising 0.17% to 0.8253.
The single currency continued to be supported by expectations that the preliminary euro zone inflation report, due for release on Wednesday, would show that consumer prices ticked higher this month.
An uptick in the region’s inflation rate would ease pressure on the European Central Bank to implement additional monetary policy measures.
Germany was to release what would be closely watched preliminary data on consumer prices later in the trading day.