Investing.com - The pound slipped lower against the dollar on Tuesday, but losses were held in check ahead of the latest U.K. jobs report and the Bank of England’s quarterly inflation report on Wednesday.
GBP/USD hit 1.6826, the lowest since May 2 and was last down 0.15% to 1.6842.
Cable was likely to find support at 1.6805 and resistance at 1.6937, Friday’s high.
Sterling’s losses were held in check amid expectations that the BoE would upgrade its forecast for growth when it presents its quarterly inflation report on Wednesday.
The latest U.K. jobs report, also due for release on Wednesday, is expected to show a another decline in the unemployment rate to a more than five year low of 6.8% in the three months to March, while wage growth is expected to rise again.
A strong reading would reinforce expectations that the BoE will raise interest rates ahead of other central banks and send the pound rising towards recent almost five year peaks against the dollar.
Elsewhere, the pound rose to 16-month peaks against the broadly weaker euro, with EUR/GBP down 0.17% to 0.8141.
The euro fell to session lows following reports that Germany’s Bundesbank is open to more stimulus measures from the European Central Bank.
The Wall Street Journal reported the German central bank would back monetary easing measures if they were needed to keep persistently low levels of inflation from becoming entrenched in the euro zone.
The ECB warned last week that it is “comfortable” with acting at its next meeting in June after it has a chance to review the latest economic projections.
The single currency also came under pressure after data showed that German economic sentiment deteriorated to a 16-month low in May.
The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 33.1 this month from 43.2 in April. Analysts had expected a reading of 41.0.
The current conditions index improved to 62.1 from 59.5 in April, ahead of expectations of 60.5.