Investing.com - The pound pared gains against the U.S. dollar on Monday, after positive U.S. pending home sales data, but remained supported near four-and-a-half year highs amid growing expectations for a rate hike by the Bank of England.
GBP/USD pulled away from 1.6827, the pair's highest since November 2009, to hit 1.6816 during U.S. morning trade, still up 0.10%.
Cable was likely to find support at 1.6762, the low of April 23 and resistance at 1.6880.
The dollar strengthened after the National Association of Realtors reported that pending home sales jumped 3.4% last month, easily surpassing expectations for a 1% gain. Pending home sales for February were revised to a 0.5% drop from a previously reported decline of 0.8%.
On a year-over-year basis, pending home sales were still down 7.9% in March.
But demand for the pound continued to be underpinned by expectations that the BoE could raise interest rates in the early part of next year.
Expectations for a rate hike were boosted earlier this month after data showed that the U.K. unemployment rate fell to a five-year low of 6.9% in the three months to February, while wage growth also accelerated.
Official data on Friday showed that U.K. retail sales rose 0.1% in March, compared to expectations for a 0.4% decline. On year-over-year basis retail sales were up 4.2%, ahead of expectations for a 3.8% increase.
Market participants were looking ahead to preliminary data on U.K. first quarter growth due for release on Tuesday, amid expectations that growth accelerated in the first three months of this year.
Sterling was little changed against the euro, with EUR/GBP inching up 0.05% to 0.8238.