Investing.com - The pound pared losses against the U.S. dollar on Wednesday, after the release of disappointing U.S. housing sector data dampened demand for the greenback, although U.K. data continued to weigh.
GBP/USD pulled away from 1.6637, the pair's lowest since February 13, to hit 1.6688 during U.S. morning trade, up 0.03%.
Cable was likely to find support at 1.6600, the low of February 13 and resistance at 1.6823, the high of February 17.
The Commerce Department said U.S. housing starts fell 16% in January to 880,000 units, compared to expectations for a 5.7% drop.
The number of building permits issued last month declined by 5.4% to a seasonally adjusted 937,000 units
A separate report showed that U.S. producer prices rose 0.2% last month, above forecasts for a 0.1% gain, while core producer prices were also up 0.2%.
Investors were looking ahead to the minutes of the Federal Reserve’s January meeting later Wednesday, when the bank voted to cut its stimulus program by another $10 billion to $65 billion per month.
Earlier this month Fed Chair Janet Yellen indicated that the central bank is on track to maintain the pace of reductions to its stimulus program, as long as the economy continues to improve as expected.
But the pound remained under pressure after the Office for National Statistics earlier said that the rate of unemployment in the U.K. ticked up to 7.2% in the three months to December from 7.1% in the previous three months.
Analysts had expected the jobless rate to remain unchanged.
The number of people claiming unemployment benefits in the U.K. declined more-than-expected in January, the ONS said. The claimant count fell by a seasonally adjusted 27,600 to 1.22 million, better than expectations for a decline of 20,000 people.
Meanwhile, average earnings index rose by 1.1% in the year to December, a 0.2% increase on the previous month.
Separately, the minutes of the Bank of England's February meeting showed that officials did not hold a vote before updating its forward guidance on rates this month, indicating a unanimous belief that an adjustment was necessary.
The bank updated its forward guidance last Wednesday, saying it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it does not see happening until 2015.
Last August the bank pledged not to consider a rate increase until the unemployment rate dropped below 7%, but that target is now set to be reached much sooner that the bank had anticipated.
Sterling was higher changed against the euro, with EUR/GBP slipping 0.10% to 0.8239.