Investing.com - The pound was trading at five-week lows against the dollar on Thursday, as expectations that the Federal Reserve may hike rates sooner than expected and upbeat U.S. data underpinned dollar demand.
GBP/USD was down 0.29% to 1.6490, the weakest level since February 12.
Cable was likely to find support at 1.6425 and resistance at 1.6567, the session high.
The dollar rallied against the other main currencies after Fed Chair Janet Yellen indicated that the bank could begin to raise interest rates about six months after its bond-buying program winds up, which is expected to happen this fall. The comments prompted investors to bring forward expectations for a rate hike to as soon as April of next year.
The Fed also cut its monthly bond purchases by an additional $10 billion to $55 billion at the conclusion of its two-day policy setting meeting on Wednesday.
Meanwhile, data on Thursday showed that U.S. initial jobless claims rose less-then-expected last week, while another report showed that manufacturing activity in the Philadelphia-region expanded at a faster rate than expected in March.
The Department of Labor reported that the number of people filing for initial jobless benefits in the week ending March 15 rose by 5,000 to 320,000 from the previous week’s total of 315,000. Analysts had expected jobless claims to rise by 10,000 last week.
The upbeat data reinforced the view that recent softness in U.S. economic reports was due to severe winter weather.
Separately, the National Association of Realtors said existing homes sales fell in February, as adverse weather and rising prices weighed.
Elsewhere, sterling was higher against the euro, with EUR/GBP down 0.20% to 0.8347.