Investing.com - The pound softened against the dollar on Thursday as investors favored the dollar in wake of Federal Reserve Chair Janet Yellen's Wednesday press conference in which she hinted at a possible timetable for interest rate hikes.
In U.S. trading on Thursday, GBP/USD was trading at 1.6514, down 0.15%, up from a session low of 1.6480 and off a high of 1.6568.
Cable was likely to find support at 1.6383, the low from Feb. 10, and resistance at 1.6666, Monday's high.
The dollar shot up for a second day after Yellen suggested at a Wednesday press conference that interest rates could rise six months after the Fed's bond-buying program ends.
The Fed is currently buying $55 billion in Treasury and mortgage debt a month, and expectations for the monetary authority to taper that figure gradually and close the program by fall followed by rate hikes in 2015 strengthened the dollar against the pound and most other currencies.
Fed asset purchases aim to stimulate the economy by suppressing interest rates, weakening the dollar as long as they remain in effect.
Elsewhere, data on Thursday showed that fewer individuals sought first-time jobless benefits in U.S. last week than markets were expecting, which added to the dollar's gains.
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.
A separate report showed that manufacturing activity in the Philadelphia-region expanded at a faster rate than expected in March.
In a report, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to a reading of 9.0 this month from February’s -6.3 reading. Analysts had expected the index to rise to 3.8 in March.
On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.
The survey’s broadest indicators for general activity, new orders, and shipments increased and recorded positive readings this month, suggesting a return to growth following weather-related weakness in February.
Company employment levels were near steady, but responses reflected optimism about adding to payrolls over the next six months.
The survey's indicators of future activity reflected optimism about continued growth over the next six months.
Soft housing data failed to seriously dent the greenback's advance, as markets dismissed the disappointing numbers as the product of rough winter weather.
The National Association of Realtors reported earlier that existing home sales fell 0.4% to a seasonally adjusted 4.60 million units in February from 4.62 million in January.
February’s pace of sales was the lowest since July 2012.
Sterling was up against the euro, with EUR/GBP down 0.18% at 0.8349, and down against the yen, with GBP/JPY down 0.06% at 169.15.
On Friday, the U.K. is to produce data on public sector net borrowing.