With you already having a very low body fat %, it's unlikely or going to be very hard to reduce this lower, unless you become a full time cyclist. Even very elite riders such as Lance (etc) can only manage or maintain 6% body fat, and this is for short periods of time (e.g., < 2 months).
If we use your figures, and assume that you have a bf % of 8.5% the mean of the two figures, then dropping your bf % to 7% will drop your weight to 165 lbs. If you dropped it to 6% (which is highly unlikely -- see above) then you'd weigh 163.5 lbs.
Added to this is, that unless you race up long, sustained climbs (on a regular basis), e.g., Alpine like passes, the weight reduction won't make any difference (and may actually slower as you are constantly trying to eat less to lose weight and also not 'fuelling' your engine correctly). Off the top of my head, a weight reduction such as you're suggesting would equal a < 5-sec decrease in time taken to complete a 25mile/40-km TT.
Keep your diet healthy, avoiding processed and fatty foods. Keep your intake of lean proteins moderate, ensure plenty of fresh fruit and veg, and lots of starchy carbohydrates (pasta, rice, bread, etc).
Most importantly, you want to increase your sustainable and peak power output, which you can do through training (this might have an additive effect in vaguely lower your mass/body fat%).