Pound traded lower on Wednesday as industrial output data surprised on the negative and the continued dollar rally helped keep the UK currency near the one-month low hit the previous day.
GBP/USD slipped to 1.5036 from Tuesday's close of 1.5070 before edging back to 1.5060. The pair had touched a low of 1.5028 in the previous session, its lowest since 3 February.
With another 80 pips, Sterling will hit its lowest since July 2013, setting the next target at 1.4813, the 2013 low. With the Fed rate hike becoming evident, the pound breaking that level to five-year lows cannot be ruled out.
Data from the UK on Wednesday showed that manufacturing production increased only 1.9% on a year-on-year basis in January, down from 2.6% in December and compared to market expectations of the same.
Month-on-month, the manufacturing output fell 0.5% after recording 0.1% growth in December and against the market consensus of an increase to 0.2% growth.
Industrial output too fell on a monthly basis in January, coming at -0.1%, better than December's -0.2% and against the market consensus of a growth to 0.2%.
The market is now waiting for the National Institute of Economic and Social Research (NIESR) GDP estimate due later in the day. Around the same time, the Bank of England's Monetary Policy Committee member Martin Weale will deliver a speech which will also be watched for central bank policy cues.
January trade balance and a speech by the BoE governor Mark Carney scheduled for Thursday will be the next set of events crucial for the pound.