The pound remained lower against the U.S. dollar on Wednesday, after weak U.S. data and after the minutes of the Bank of England’s April meeting earlier showed a wide range of views over economic slack and the inflation outlook.
GBP/USD hit 1.6781 during U.S. morning trade, the pair's lowest since April 18; the pair subsequently consolidated at 1.6786, shedding 0.22%.
Cable was likely to find support at 1.6720, the low of April 16 and resistance at 1.6842, the high of April 17 and a four-and-a-half year high.
Data showed that sales of new homes in the U.S. fell to the lowest level since July 2013 in March.
The Commerce Department reported that sales on new homes dropped 14.5% to a seasonally adjusted rate of 384,000. Market expectations had been for sales rate of 450,000.
Earlier Wednesday, the minutes showed that the members of the Monetary Policy Committee were “uncertain” about the amount of slack remaining in the economy and also held differing views on the outlook for inflation over the medium term.
The annual rate of U.K. inflation dropped to 1.6% in March from 1.7% the previous month, the lowest level since October 2009.
The minutes also showed that MPC members voted unanimously to keep interest rates at a record low 0.5%.
A separate report showed that the U.K. government has hit its target for deficit reduction for the last financial year.
The Office for National Statistics said that public sector net borrowing in 2013 to 2014 came in at £107.7 billion, or 6.6% of gross domestic product.
Sterling was lower against the euro, with EUR/GBP gaining 0.43% to 0.8241.
The single currency found support after data released on Wednesday showed that the recovery in the euro zone private sector accelerated this month, but pointed to a divergence between Germany and France.
The euro zone manufacturing purchasing managers’ index rose to 53.3 this month from 53.0 in March, compared to expectations for an unchanged reading.
The bloc’s services PMI rose to 53.1 from 52.2 the previous month, better then forecasts for 52.4.