Investing.com - The pound held steady against the U.S. dollar on Friday, hovering close to a more than one-month high as the Bank of England's latest inflation report continued to support, while Thursday's U.S. data still weighed on the greenback.
GBP/USD hit 1.5419 during European morning trade, the pair's highest since January 2; the pair subsequently consolidated at 1.5388.
Cable was likely to find support at 1.5206, Thursday's low and resistance at 1.5586, the high of January 2.
The pound had strengthened on Thursday after the BoE said inflation is likely to fall to zero in the first half of this year, but added that there was no threat of deflation taking hold in the U.K.
In its quarterly inflation report, the BoE said "it is now more likely than not that CPI inflation will dip briefly below zero at some point in the first half of 2015,” and remain "close to zero" for most of the year.
However, BoE Governor Mark Carney said there was not threat of persistent deflation as the decline in inflation was due to falling petrol, food and energy prices.
In addition, the bank said it would now consider cutting interest rates below 0.5% if inflation dips more deeply into negative territory than expected.
The BoE also raised its growth forecast for this year to 2.9% from 2.6% previously and said it also expects growth of 2.9% in 2016.
Meanwhile, sentiment on the dollar remained vulnerable after the U.S. Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the week ending February 7 increased by 25,000 to 304,000, compared to expectations for a 6,000 rise to 285,000.
Data also showed that U.S. retail sales declined by 0.8% last month, worse than expectations for a drop of 0.5%, while core retail sales, which exclude automobile sales, slumped 0.9% in December.
Sterling was lower against the euro, with EUR/GBP adding 0.17% to 0.7424.
Later in the day, the U.S. was to produce preliminary data on consumer sentiment.