Investing.com - The pound was holding close to its highest level against the dollar in almost five years on Thursday ahead of the conclusion of the Bank of England’s two-day policy meeting later in the day.
GBP/USD was trading at 1.6967, after rising as high as 1.6993 on Tuesday, the strongest level since August 2009.
Cable was likely to find support at 1.6925 and resistance at 1.7000.
The BoE was expected to leave monetary policy unchanged at the conclusion of its monthly meeting, but expectations for a U.K. rate hike in the early part of next year have been bolstered by a recent string of reports indicating that the economic recovery is deepening.
Early last week BoE Governor Mark Carney said the U.K. recovery is starting to broaden, but added that the bank still sees plenty of slack in the labor market.
Data released on Thursday showed that U.K. house prices fell in April from a month earlier, easing concerns that the property market is overheating.
British house prices fell 0.2% last month, mortgage lender Halifax reported, and rose 8.5% in the three months to April, compared to the same period a year earlier, slowing from an increase of 8.5% in the three months to March.
The pound was lower against the euro, with EUR/GBP rising 0.14% to 0.8216, after falling to a two-month trough of 0.8192 in the previous session.
Demand for the single currency continued to be underpinned as expectations for fresh easing measures from the European Central Bank waned ahead of the banks policy announcement later Thursday.
The ECB was widely expected to leave monetary policy on hold after recent data showed that the annual rate of inflation in the euro zone ticked up to 0.7% in April from a record low 0.5% in March. The ECB targets inflation of close to but just below 2%.
The uptick in consumer prices eased pressure on the bank to take fresh steps to tackle low inflation in the region.