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Investing.com - The pound fell against a firming dollar on Wednesday after data revealed the U.S. economy grew faster than expected in the second quarter, fueling market talk the Federal Reserve will raise interest rates sooner than markets once anticipated.
In U.S. trading on Wednesday, GBP/USD was trading down 0.26% at 1.6900 up from a session low of 1.6889 and off a high of 1.6955.
Cable was likely to find support at 1.6739, the low from June 11, and resistance at 1.7001, Monday's high.
The Commerce Department reported earlier that U.S. gross domestic product expanded at an annual rate of 4.0% in the three months to June, blowing past forecasts for a 3.0% reading. The contraction in the first quarter was revised to 2.1% from a previously reported 2.9%.
Personal consumption grew 2.5%, well above predictions of 1.9%, the report said, adding to the view that the economic recovery is gaining traction.
The robust data offset a report from payroll processor ADP revealing that the U.S. private sector added 218,000 jobs in July, missing forecasts for a 230,000 reading.
Investors kept an eye towards the Federal Reserve, which was due to release its statement on interest rates and monetary policy later in the day, though talk rate hikes may arrive sooner rather than later fueled the dollar and even sent U.S. stock prices falling.
Elsewhere, sterling was flat against the euro, with EUR/GBP up 0.01% at 0.7915, and up against the yen, with GBP/JPY up 0.54% at 173.96.
On Thursday, the U.K. is to produce private sector data on house price inflation.
The U.S. is to release the weekly report on initial jobless claims, as well as data on manufacturing activity in the Chicago area.
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