Investing.com - The pound edged lower against the dollar on Tuesday after U.S. inflation data met expectations and while housing numbers beat forecasts, confirming market sentiments that the Federal Reserve remains on track to wind down stimulus programs this year and raise interest rates the next.
In U.S. trading on Tuesday, GBP/USD was trading down 0.13% at 1.7054, up from a session low of 1.7042 and off a high of 1.7084.
Cable was likely to find support at 1.7037, Friday's low, and resistance at 1.7100, Monday's high.
Geopolitical concerns in the Ukraine and Israel briefly took a back seat to U.S. data and firmed the greenback over the pound.
The Labor Department reported earlier that the U.S. consumer price index rose 2.1% in June, unchanged from the previous month and in line with forecasts, which drew applause for the dollar.
On a month-over-month basis, U.S. consumer prices were up 0.3% after a 0.4% increase in May, also in line with expectations.
Figures that met but did not exceed Wall Street expectations bolstered the dollar, as un upside surprise could have rattled nerves and sent many investors rethinking what the Federal Reserve will do with monetary policy.
Market talk points to the Fed ending its bond-buying program around October and then raising interest rates some time in 2015, though the length of time that will pass between those two policy moves remains up in the air.
June's core inflation rate, which excludes food and energy costs, rose by just 0.1% from May and 1.9% on year, slightly below market calls for 0.2% and 2.0% readings, respectively, which illustrated how gasoline was driving the CPI up, though markets viewed the numbers as fundamentally healthy anyway.
Elsewhere, the National Association of Realtors reported earlier that existing U.S. home sales rose 2.6% to 5.04 million units in June from 4.91 million in May, beating market forecasts for a 2.0% rise to 4.97 million units.
Meanwhile across the Atlantic Ocean, the Confederation of British Industry said that its index for industrial order expectations declined to 2 this month from 11 in June, missing expectations for a fall to 8.
Elsewhere, sterling was up against the euro, with EUR/GBP down 0.30% at 0.7896, and down slightly against the yen, with GBP/JPY down 0.01% at 173.13.
On Tuesday, the Bank of England is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective. Later in the day, BoE Governor Mark Carney is to speak.