Investing.com - The pound held steady against the dollar on Tuesday even after data revealed the U.K. economy grew less than markets were expecting in the first quarter, as a lackluster consumer confidence report in the U.S. softened greenback demand, though the pair remained range bound.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6826, up 0.12%, up from a session low of 1.6793 and off a high of 1.6847.
Cable was likely to find support at 1.6778, Monday's low, and resistance at 1.6857, Monday's high.
Sterling initially edged lower after the Office of National Statistics reported that the U.K. economy grew 0.8% in the first quarter, bringing the annual rate of growth to 3.1%.
Market expectations had been for quarterly growth of 0.9% and an annual expansion of 3.2%, though the actual figure was still the fastest rate of annual growth since the fourth quarter of 2007, which gave the pound an edge over the dollar.
In the previous quarter, gross domestic product grew by 0.7%.
The U.K.’s dominant service sector grew 0.9% during the quarter, the ONS said, while manufacturing output rose 1.3% and construction output grew 0.3%.
Recent upbeat economic indicators have fueled expectations that the Bank of England could raise interest rates in the early part of next year, propelling sterling to multi-year highs against the dollar.
Earlier Tuesday, 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.
Meanwhile in the U.S., the Conference Board, a market research group, said its consumer confidence index declined to 82.3 in April from a 83.9 in March, whose figure was revised up from a previously reported 82.3.
Analysts had expected the index to inch down to 83.0 in April.
The Present Situation Index decreased to 78.3 from 82.5, while the Expectations Index was virtually unchanged at 84.9 versus 84.8 in March.
“Consumer confidence declined slightly in April, as consumers assessed current business and labor market conditions less favorably than in March,” Lynn Franco, Director of Economic Indicators at The Conference Board, said in a statement.
“However, their expectations regarding the short-term outlook for the economy and labor market held steady. Thus, while sentiment regarding current conditions may have slipped a bit, consumers do not foresee the economy, or the labor market, losing the momentum that has been building up over the past several months.”
Elsewhere, sterling was up against the euro, with EUR/GBP down 0.39% at 0.8208, and up against the yen, with GBP/JPY up 0.21% at 172.62.
On Wednesday, the U.S. is to release preliminary data on first quarter GDP, as well as the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on manufacturing activity in the Chicago region.
Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement.