Investing.com - The pound edged higher against the U.S. dollar on Tuesday, after data showed that the U.K. economy expanded at a faster rate than expected in the last quarter, although demand for the greenback remained broadly supported.
GBP/USD hit 1.6287 during European morning trade, the pair's highest since September 26; the pair subsequently consolidated at 1.6257, adding 0.09%.
Cable was likely to find support at 1.6160, the low of September 16 and resistance at 1.6334, the high of September 26.
In a revised report, the Office for National Statistics said that the U.K. gross domestic product increased by 0.9% in the second quarter, beating expectations for 0.8% growth and up from a previous estimate of 0.7%.
Year-on-year, the U.K. economy expanded at a 3.2% rate in the second quarter, in line with expectations.
A separate report showed that the U.K. current account deficit widened to £23.1 billion in the last quarter, from a revised deficit of £20.5 billion in the first three months of the year. Analysts had expected the current account deficit to narrow to £17.0 billion in the second quarter.
Earlier in the day, the Nationwide Building Society reported that U.K. house prices fell 0.2% this month, compared to expectations for an increase of 0.5%, after a 0.8% gain in August.
Meanwhile, the dollar remained broadly supported by the view that the strengthening economic recovery in the U.S. would prompt the Federal Reserve to hike rates sooner.
A report on Monday showed that U.S. household spending rose at a faster than expected rate in August, indicating that the economic recovery was likely to continue in the current quarter.
Sterling was higher against the euro, with EUR/GBP shedding 0.22% to 0.7794.
Also Tuesday, official data showed that German retail sales rose 2.5% in August, exceeding expectations for a 0.5% gain, after a revised 1.1% decline the previous month.
Data also showed that the number of unemployed people in Germany rose by 13,000 last month, compared to expectations for a 2,000 decline. Germany's unemployment change for July was revised to a 3,000 increase from a previously estimated 1,000 rise.
Germany's unemployment rate remained unchanged at 6.7% last month, in line with estimates.