Investing.com - The pound remained higher against the U.S. dollar in subdued trade on Tuesday, as speculation the Bank of England could raise interest rates earlier than expected continued to support demand for sterling.
GBP/USD hit 1.6840 during U.S. morning trade, the pair's highest since April 17; the pair subsequently consolidated at 1.6827, adding 0.21%.
Cable was likely to find support at 1.6720, the low of April 16 and resistance at 1.6842, the high of April 17 and a four-and-a-half year high.
Demand for sterling continued to be underpinned after data last week showing that the U.K. unemployment rate fell to a five year low in the three months to February fuelled expectations for a rate hike by the Bank of England in the first quarter of next year.
In the U.S., industry data showed that existing home sales declined to 4.59 million units in March, from 4.60 million the previous month, compared to expectations for an drop to 4.55 million units.
Sterling was steady against the euro, with EUR/GBP inching down 0.06% to 0.8209.
Sentiment on the single currency remained vulnerable after European Central Bank President Mario Draghi warned earlier this month that further gains in the euro would trigger additional monetary easing to keep inflation from falling.
The annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.
On Tuesday, ECB Executive Board member Benoit Coeure said the bank still had room to lower its key interest rates.