Investing.com - The pound remained lower against the U.S. dollar on Monday, although it was hovering withing close distance of a four-year high amid expectations that the Bank of England may raise rates next year.
GBP/USD hit 1.6710 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.6723, slipping 0.16%.
Cable was likely to find support at 1.6645, the low of February 14 and resistance at 1.6823, the session high and a four-year high.
The pound remained supported after the BoE raised its U.K. economic growth forecast for 2014 to 3.4% from 2.8% last week, and indicated that it may raise interest rates next year.
In its quarterly inflation report, the bank also updated its forward guidance on bank rates, saying it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it sees happening in 2015.
Meanwhile, the dollar remained under pressure after data on Friday showing that U.S. factory output fell unexpectedly in January clouded the outlook for the economic recovery.
Trade volumes were expected to remain thin on Monday, with U.S. markets shut for the President’s Day holiday.
Sterling was lower against the euro, with EUR/GBP rising 0.24% to 0.8195.
Demand for the euro remained underpinned after Friday’s better-than-expected euro zone fourth quarter growth data eased concerns that the European Central Bank could tighten monetary policy at its next meeting.
Also supporting the euro, ECB governing council member Ewald Nowotny said Monday the banks bond buying program is “not that relevant” anymore, because of the improved economic situation.