Pound Higher As European Shares Climb Ahead Of Fed Decision
(RTTNews) - The pound appreciated against its major rivals in the European session on Wednesday, as Fed pause hopes and encouraging data from Germany and the U.K. underpinned sentiment.
Signs of slowing U.S. inflation bolstered bets that the Fed will hold its key interest rate steady after ten consecutive rate hikes over the last 15 months.
Investors will likely parse the accompany policy statement, the summary of economic projections and remarks from Fed Chairman Jerome Powell during the press conference for clues over the appropriate path forward for monetary policy.
A surprise rate cut by the People's Bank of China is also aiding market sentiment.
Data from the Office for National Statistics showed that the U.K. economy expanded by 0.2 percent on a monthly basis in April, following a decline of 0.3 percent in March. That was in line with economists' expectations.
The pound advanced to a 2-day high of 0.8541 against the euro and a 7-1/2-year high of 177.14 against the yen, off its early lows of 0.8560 and 176.44, respectively. The currency is seen finding resistance around 0.84 against the euro and 185.00 against the yen.
The pound was higher against the franc, at 1.1428. On the upside, 1.17 is likely seen as its next resistance level.
The pound touched 1.2649 against the greenback, its highest level since May 10. The pound may find resistance around the 1.30 level.
Looking ahead, U.S. PPI for May is due in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the Fed to hold the policy rate steady at 5.00 percent to 5.25 percent.
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