Investing.com - The pound fell to fresh two-week lows against the dollar on Wednesday after data showed that growth in U.K. retail sales slowed this month, dampening expectations for a rate hike by the Bank of England later this year.
GBP/USD hit lows of 1.6742, the weakest since May 15 and was last down 0.34% to 1.6751.
Cable was likely to find support at 1.6725 and resistance at 1.6850.
Sterling fell to session lows against the dollar after the Confederation of British Industry said the result of its index of U.K. retailers dropped to 16.0 this month from 30.0 in April.
The data came one day after a report by the British Bankers' Association showed that banks approved the lowest number of mortgages since August last month.
The data indicated that the U.K. housing market could be losing some momentum, although house prices remained strong.
The pound has performed strongly against the dollar and the euro this year amid expectations that the rapid economic recovery in Britain would prompt the BoE to hike borrowing costs ahead of other central banks.
Demand for the dollar continued to be underpinned after data on Tuesday showed that U.S. durable goods orders rose unexpectedly in April and another report showed that U.S. consumer confidence improved in line with forecasts this month.
Elsewhere, the euro pushed higher against sterling, with EUR/GBP easing up 0.19% to 0.8127, recovering from the 17-month trough of 0.8080 plumbed last Friday.
The euro remained under pressure amid expectations for monetary easing by the European Central Bank at its upcoming meeting next week.
Meanwhile, data on Wednesday showed that the number of people unemployed in Germany rose by the largest amount in five years in May. The seasonally adjusted jobless total rose by 24,000 this month to 2.905 million, compared to expectations for a fall of 15,000.