Investing.com - The pound pared back early gains against the dollar on Wednesday after data showing that U.K. economic growth slowed in the first three months of the year.
GBP/USD was last at 1.4573, off earlier highs of 1.4619.
Sterling was also little changed against the euro, with EUR/GBP at 0.7750 off earlier highs of 0.7784.
The U.K. economy grew 0.4% in the three months to March the Office of National Statistics said, in line with economists’ expectations, but slowing from 0.6% in the prior quarter.
The service sector was the only part of the economy to grow in the first quarter, the data showed, with manufacturing, construction and agriculture all contracting.
Service sector output grew by 0.6%, industrial production fell by 0.4% and construction contracted by 0.9%.
The economy grew at an annual rate of 2.1% in the first quarter, slightly higher than economists’ expectations for growth of 2.0% and matching the previous quarter.
U.K. Chancellor George Osborne warned that uncertainty over a possible British exit from the European Union was weighing on the economy.
"It's good news that Britain continues to grow, but there are warnings today that the threat of leaving the EU is weighing on our economy," he said.
The dollar remained on the defensive as investors looked ahead to a policy decision from the Federal Reserve later in the trading day.
The Fed, which hiked rates for the first time in almost a decade in December, is expected to hold steady for now, but investors will be looking at the bank’s rate statement for indications on the likelihood of a June interest rate increase.
Investors were also looking ahead to the conclusion of the Bank of Japan’s policy meeting on Thursday amid heightened expectations for fresh easing measures.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.41.