Investing.com - The pound slipped lower against the U.S. dollar on Wednesday, despite upbeat U.K. second quarter growth data, as investors remained cautious ahead of the Federal Reserve’s policy statement due later in the day and the Bank of England’s policy meeting next week.
GBP/USD hit 1.3106 during European morning trade, the session low; the pair subsequently consolidated at 1.3113, slipping 0.14%.
Cable was likely to find support at 1.2968, the low of July 12 and resistance at 1.3293, the high of July 22.
The U.K. Office for National Statistics said gross domestic product rose 0.6% in the three months to June, above forecasts for growth of 0.4%. The U.K. economy grew by 0.4% in the previous quarter.
Year-over-year, U.K. economic growth expanded 2.2% in the second quarter, also above the forecast for an expansion of 2.0%. The U.K. economy grew at an annualized rate of 2.0% in the first quarter.
The second quarter data is the final measure of growth in the run-up to the U.K.’s June 23 referendum that resulted in Britain’s decision to leave the European Union, known as a Brexit.
According to a Bloomberg survey released on Wednesday, consensus expects the U.K. to contract by 0.1% in the third quarter.
Investors were now eyeing the BoE’s upcoming policy meeting amid growing expectations for a rate cut.
The Financial Times reported on Tuesday that Martin Weale, a member of the BOE's rate-setting committee, dropped his opposition to an easing and now favored immediate stimulus.
Market participants were also looking ahead to the Fed’s policy decision due later Wednesday. While most investors expect the Fed to leave its monetary policy unchanged this week, it could give hints on the timing of future rate hikes.
Sterling was also lower against the euro, with EUR/GBP rising 0.24% to 0.8391.