Investing.com - The pound erased losses against the U.S. dollar on Wednesday, after disappointing U.S. economic reports dampened demand for the greenback, although lowered expectations for a U.K. rate hike continued to weigh on sterling.
GBP/USD pulled away from 1.6952, the pair's lowest since June 18, to hit 1.7000 during U.S. morning trade, up 0.09%.
Cable was likely to find support at 1.6924, the low of June 18 and resistance at 1.7061, the high of June 20.
The dollar came under pressure after the Commerce Department said gross domestic product contracted at an annual rate of 2.9% in the first three months of the year, compared to the consensus forecast for a decline of 1.7%.
U.S. first quarter GDP was initially reported to have increased by 0.1%, but was subsequently revised to show a contraction of 1.0%.
The difference between the second and third estimate was the largest since records began in 1976, the Commerce Department said.
The data showed personal consumption grew 1.0% in the three months to March, below expectations for a 2.4% increase and down from an initial estimate of 3.5%. Consumer spending typically accounts for nearly 70% of U.S. economic growth.
A separate report showed that U.S. durable goods orders fell 1.0% in May, while core durable goods orders fell 0.1%. Market expectations had been for an increase of 0.2% and 0.4%, respectively.
Meanwhile, sentiment on the pound remained vulnerable after Bank of England Governor Mark Carney said Tuesday that wage growth has been lower than expected, which could indicate that there is more slack in the U.K. labor market than the bank previously thought.
He balanced this by saying that the economic recovery has more momentum than the bank would have expected.
In testimony to parliament’s Treasury committee, Carney said the exact timing of rate rises would be driven by data and reiterated that when rate hikes did come they would be limited and gradual.
Sterling was lower against the euro, with EUR/GBP adding 0.19% to 0.8026.