Investing.com - The pound softened against the dollar on Tuesday as the greenback enjoyed safe-haven demand from investors awaiting the Federal Reserve's Wednesday announcement on U.S. interest rates and monetary policy.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6036, down 0.66%, up from a session low of 1.6023 and off from a high of 1.6144.
Cable was likely to find support at 1.5894, the low from Oct. 16, and resistance at 1.6247, Friday's high.
Uncertainty over the Fed's language and forward guidance on monetary policy kept investors camped out in safe-haven greenback positions on Tuesday despite lackluster economic data.
The Conference Board said its index of consumer confidence dropped to 71.2 in October from an upwardly revised reading of 80.2 in September.
Analysts were expecting the index to fall to 75.0 this month.
The data came on the heels of Commerce Department data showing that U.S. retail sales fell 0.1% in September, while core retail sales, which exclude transportation items and gasoline, rose 0.4%, both in line with expectations.
Separately, the Labor Department reported that the country's producer price index contracted 0.1% in September, defying gains for a 0.2% gain.
The data cemented expectations that the Fed will maintain its USD85 billion monthly bond-buying program for the near future, possibly into first quarter of next year, to safeguard U.S. economic recovery.
Asset purchases aim to spur recovery by driving down long-term borrowing costs, weakening the dollar in the process, though investors chose to remain parked in the greenback on Tuesday before digesting the Federal Reserve's language on Wednesday.
Expectations for the Fed to keep policy unchanged have also been priced into trading, which gave the greenback room to post modest gains on Tuesday.
Across the Atlantic, the pound found little support after the Bank of England said mortgage approvals rose to 66,735 in September from an upwardly revised 63,396 in August.
Analysts were forecasting a 66,000 reading.
The BoE said net mortgage lending ticked down to GBP1 billion pounds in September, from an upwardly revised GBP1.1 billion in August.
Meanwhile, net lending to individuals decreased to GBP1.4 billion in September from an upwardly revised GBP1.7 billion in August.
Analysts were forecasting increases of GBP1.2 billion and GBP2.5 billion respectively.
The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.35% at 0.8570 and GBP/JPY down 0.17% at 157.41.
On Wednesday, markets will move on the Federal Reserve's announcement on monetary policy.
Also on Wednesday, the U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6036, down 0.66%, up from a session low of 1.6023 and off from a high of 1.6144.
Cable was likely to find support at 1.5894, the low from Oct. 16, and resistance at 1.6247, Friday's high.
Uncertainty over the Fed's language and forward guidance on monetary policy kept investors camped out in safe-haven greenback positions on Tuesday despite lackluster economic data.
The Conference Board said its index of consumer confidence dropped to 71.2 in October from an upwardly revised reading of 80.2 in September.
Analysts were expecting the index to fall to 75.0 this month.
The data came on the heels of Commerce Department data showing that U.S. retail sales fell 0.1% in September, while core retail sales, which exclude transportation items and gasoline, rose 0.4%, both in line with expectations.
Separately, the Labor Department reported that the country's producer price index contracted 0.1% in September, defying gains for a 0.2% gain.
The data cemented expectations that the Fed will maintain its USD85 billion monthly bond-buying program for the near future, possibly into first quarter of next year, to safeguard U.S. economic recovery.
Asset purchases aim to spur recovery by driving down long-term borrowing costs, weakening the dollar in the process, though investors chose to remain parked in the greenback on Tuesday before digesting the Federal Reserve's language on Wednesday.
Expectations for the Fed to keep policy unchanged have also been priced into trading, which gave the greenback room to post modest gains on Tuesday.
Across the Atlantic, the pound found little support after the Bank of England said mortgage approvals rose to 66,735 in September from an upwardly revised 63,396 in August.
Analysts were forecasting a 66,000 reading.
The BoE said net mortgage lending ticked down to GBP1 billion pounds in September, from an upwardly revised GBP1.1 billion in August.
Meanwhile, net lending to individuals decreased to GBP1.4 billion in September from an upwardly revised GBP1.7 billion in August.
Analysts were forecasting increases of GBP1.2 billion and GBP2.5 billion respectively.
The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.35% at 0.8570 and GBP/JPY down 0.17% at 157.41.
On Wednesday, markets will move on the Federal Reserve's announcement on monetary policy.
Also on Wednesday, the U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.