Investing.com - The pound erased gains against the U.S. dollar on Friday, as a disappointing U.S. home sales report weighed on market sentiment and as weak U.K. data dampened demand for sterling.
GBP/USD pulled away from 1.6725, the pair's highest since February 18, to hit 1.6642 during U.S. morning trade, down 0.05%.
Cable was likely to find support at 1.6480, the low of January 27 and resistance at 1.6742, the high of February 18.
The National Association of Realtors said U.S. existing home sales declined 5.1% to 4.62 million units last month, compared to expectations for a 4.3% drop to 4.68 million units.
In December, existing home sales were revised to a 0.8% rise to 487 million units from an initially estimated 1% increase.
In the U.K., official data earlier showed that retail sales dropped 1.5% in January, more than the expected 1% decline. Retail sales in December were revised down to a 2.5% increase from a previously estimated 2.6% gain.
On a yearly basis, U.K. retail sales rose 4.3% last month, compared to expectations for a 5% increase, after a 5.3% advance in December.
A separate report showed that public sector net borrowing in the U.K. dropped by 6.4 billion in January, confounding expectations for a 9 billion decline. Public sector net borrowing for December was revised down to a 9 billion increase from a previously estimated 10.4 billion jump.
Sterling was fractionally lower against the euro, with EUR/GBP edging up 0.09% to 0.8244.
Sentiment on the euro remained fragile after the Markit euro zone composite output purchasing managers’ index on Thursday ticked down to a two-month low of 52.7 this month, but remained close to January’s 31-month high of 52.9.
A modest pickup in euro zone service sector activity was offset by an easing the rate of manufacturing output. However, manufacturing activity continued to outperform services activity, due in large part to strong export demand from outside the euro area.