Investing.com - The pound firmed against the dollar on Monday after U.S. pending home sales came in short of forecasts and clouded expectations as to when the Federal Reserve may hike interest rates next year.
In U.S. trading on Monday, GBP/USD was up 0.31% at 1.6134, up from a session low of 1.6082 and off a high of 1.6147.
Cable was likely to find support at 1.5993, Thursday's low, and resistance at 1.6186, last Tuesday's high.
Pending home sales in the U.S. rose less than expected in September, dampening optimism over the health of the housing sector, industry data revealed on Monday.
The National Association of Realtors reported earlier its pending home sales index rose by 0.3% last month, disappointing expectations for a 0.5% gain. Pending home sales in August fell by 1%.
Year-on-year, pending home sales rose 1.0% in September, missing expectations for a 2.2% reading following a 4.1% decline in August.
Moderating price growth and sustained inventory levels are keeping conditions favorable for buyers.
“Housing supply for existing homes was up in September 6% from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,” said Lawrence Yun, the association's chief economist.
The numbers weakened the dollar by clouding expectations as to when the Federal Reserve may hike benchmark interest rates.
While the U.S. central bank is seen closing its monthly bond-buying stimulus program likely this week, spotty U.S. data have made it unclear when rate hikes might begin in 2015.
On Friday, the Census Bureau reported that U.S. new home sales rose 0.2% in September to 467,000 units, missing expectations for an increase to 470,000 units.
The August figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units.
Still, the dollar didn't plunge, as a longer-range view of economic indicators still points to a sustained U.S. recovery, including in the housing sector.
Earlier last week, the National Association of Realtors reported that U.S. existing home sales increased 2.4% to a 5.17 million units last month from 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.10 million units in September.
The pound, meanwhile, continued to enjoy support from U.K. growth data.
The Office for National Statistics reported last week that the U.K.'s preliminary gross domestic product rose 0.7% in the third quarter, in line with expectations, after a 0.9% increase in the three months to June.
Year-on-year, Britain's GDP rose at an annualized rate of 3.0% in the last quarter, also in line with expectations, down from a 3.2% growth rate in the second quarter.
Elsewhere, sterling was flat against the euro, with EUR/GBP up 0.01% at 0.7877, and down against the yen, with GBP/JPY down 0.08% at 173.81.
On Tuesday, the U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.