Investing.com - The pound fell to session lows against the U.S. dollar on Wednesday, weighed by the release of disappointing U.K. data on industrial and manufacturing output, while demand for the greenback remained supported by upbeat economic data.
GBP/USD hit 1.6830 during European morning trade, the pair's lowest since Monday; the pair subsequently consolidated at 1.6836, shedding 0.30%.
Cable was likely to find support at 1.6739, the low of June 11 and resistance at 1.6927, the high of July 31.
In a report, the Office for National Statistics said industrial production rose 0.3% in June, undershooting forecasts for a 0.6% gain, after falling 0.6% in May.
Industrial output rose 1.2% year-over-year, compared to expectations for an increase of 1.5%.
Manufacturing production was up 0.3% in June, after falling 1.3% in May. Economists had forecast an increase of 0.6%.
Manufacturing output was 1.9% higher on a year-over-year basis, falling short of forecasts for a 2.1% rise.
The data came after a report on Tuesday showed that U.K. service sector activity expanded at the fastest rate since December 2013 in July, indicating that the recovery in the U.K. economy is still being chiefly driven by the country's dominant services sector.
Expectations for a rate hike by the Bank of England before the end of this year were boosted after the bank recently signalled that rates could rise sooner than markets expect if the recovery continues. Still, the BoE was expected to keep rates on hold at the conclusion of its monthly monetary policy review on Thursday.
Meanwhile, the dollar remained supported after data on Tuesday showed that the U.S. service sector expanded at the fastest pace in more than three years in July and U.S. factory orders rose at a faster then expected rate in June.
Markets were also jittery as a buildup of Russian armed forces along its border with Ukraine fuelled fresh concerns over geopolitical tensions in the region, underpinning safe haven demand.
Sterling was lower against the euro, with EUR/GBP rising 0.23% to 0.7940.
The single currency's gains were held in check ahead of the conclusion of the European Central Bank’s monthly policy meeting on Thursday, amid concerns over the diverging monetary policy stance between it and its major peers.