Investing.com - The pound firmed against the dollar on Thursday after Federal Reserve Chair Janet Yellen told U.S. legislators monetary authorities were concerned with soft economic indicators though monetary policy remains on course for now.
Disappointing weekly jobless claims numbers softened the greenback as well.
In U.S. trading on Thursday, GBP/USD was trading at 1.6680, up 0.06%, up from a session low of 1.6617 and off a high of 1.6698.
Cable was likely to find support at 1.6584, Monday's low, and resistance at 1.6727, Tuesday's high.
Speaking before the Senate banking committee, Yellen told lawmakers it was hard to say how much the recent soft data was due to rough winter weather and added that the bank would remain attentive to signals on whether the recovery is progressing in line with expectations.
Recent manufacturing, jobs and other economic indicators have disappointed markets repeatedly in recent weeks, though uncertainty over the influence a string of winter storms may have had on commerce fueled uncertainty in currency and other markets.
Her comments softened the dollar by clouding expectations as to how slowly the Fed will taper its monthly bond-buying program, which weakens the dollar by suppressing long-term interest rates to spur recovery.
Also softening the dollar, weekly data revealed that the number of individuals filing for unemployment assistance in the U.S. last week rose more than expected.
The Labor Department said the number of people filing for initial jobless benefits rose by 14,000 to 348,000 from the previous week’s total of 334,000. Analysts had expected an increase of just 1,000, and the numbers rekindled expectations for a very gradual tapering of Fed asset purchases.
Also on Thursday, the Commerce Department reported that U.S. durable goods orders declined by a seasonally adjusted 1% last month, less than expectations for a 1.5% drop.
Core durable goods orders, excluding volatile transportation items, rose 1.1% in January, the largest increase since May, confounding forecasts for a 0.3% decline, which gave the dollar some support.
Sterling was down against the euro, with EUR/GBP up 0.11% at 0.8219, and down against the yen, with GBP/JPY down 0.18% as 170.34.
On Friday, the U.S. is to released revised data on fourth-quarter growth, a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private-sector data on pending home sales.