Investing.com - The pound weakened against the dollar on Wednesday after soft U.K. manufacturing and industrial production reports sent investors rethinking their estimates as to when the Bank of England will tighten policy.
In U.S. trading on Wednesday, GBP/USD was trading down 0.23% at 1.6848 up from a session low of 1.6822 and off a high of 1.6887.
Cable was likely to find support at 1.6813, Monday's low, and resistance at 1.6888, Tuesday's high.
Manufacturing production in the U.K. rose less than expected in June, while industrial output also came in below forecasts, official data showed on Wednesday.
In a report, the U.K. Office for National Statistics said that manufacturing production inched up by 0.3% in June, disappointing expectations for a gain of 0.6%.
On an annualized basis, manufacturing production rose at rate of 1.9% in June, below forecasts for a 2.1% increase.
The report also showed that industrial production rose by 0.3% in June, missing expectations for a 0.6% gain.
The Bank of England is to release its latest decision on interest rates and monetary policy on Thursday, and Wednesday's lackluster data prompted investors to avoid the pound ahead of time.
While the BoE is seen tightening policy ahead of other major central banks, uncertainty as to when weakened the pound on Wednesday.
Meanwhile in the U.S., the dollar saw support after data revealed that the U.S. trade deficit narrowed unexpectedly to a five-month low of $41.54 billion in June from $44.66 billion in May.
Analysts were expecting a $44.70 billion trade gap.
Geopolitical concerns watered down the dollar's advance and bolstered demand for gold.
Reports that Russia continues to amass troops along its border with Ukraine in wake of a U.S.-European decision to slap sanctions on Moscow for allegedly backing separatists frayed nerves due to fears the conflict will weigh on global growth.
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.16% at 0.7935, and down against the yen, with GBP/JPY down 0.71% at 172.01.
On Thursday, the pair will move on the Bank of England's announcement on interest rates and monetary policy.
The U.S. is to publish the weekly report on initial jobless claims.