The pound spiked up against its major counterparts in the early European session on Wednesday, after a data showed that U.K. inflation rose to a seven-month high in August.

Data from the Office for National Statistics showed that consumer price inflation increased unexpectedly to 2.7 percent in August from 2.5 percent in July. This was the highest rate since January. Economists had forecast inflation to ease to 2.4 percent.

Month-on-month, consumer prices climbed 0.7 percent, faster than the expected 0.5 percent.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, rose to 2.1 percent from 1.9 percent in July.

Another report from ONS showed that output price inflation slowed to 2.9 percent in August, in line with forecast from 3.1 percent a month ago. Compared to July, output prices gained 0.2 percent.

Input price inflation slowed to 8.7 percent from 10.3 percent in July. The expected rate of increase was 9.1 percent. On a monthly basis, input prices rose 0.5 percent after staying flat in July.

European shares rose amid bets that China and the U.S. will resume contentious trade talks after the latest tariff round.

In addition, speculation is rife that China will increase economic stimulus to soften the blow of the higher U.S. tariffs.

The currency has been trading in a positive territory against its major counterparts in the Asian session, with the exception of the euro.

The pound appreciated to more than a 2-month high of 1.3215 against the greenback, from a low of 1.3136 hit at 5:00 pm ET. On the upside, 1.34 is possibly seen as its next resistance level.

The pound firmed to 1.2746 versus the franc, its highest since August 10. This follows a low of 1.2670 touched at 5:00 pm ET. If the pound climbs further, 1.30 is likely seen as its next resistance level.

The Swiss federal government's expert group raised its growth outlook for 2018 but maintained the estimate for 2019.

The State Secretariat for Economic Affairs said the economy is forecast to grow 2.9 percent this year instead of 2.4 percent projected in June. The outlook for 2019 was retained at 2 percent.

Reversing from an early low of 147.61 against the yen, the pound climbed to more than a 2-month high of 148.54. The next possible resistance for the pound is seen around the 150.00 level.

The Bank of Japan kept its ultra-loose monetary policy unchanged, as widely expected.

The policy board of the BoJ decided to purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The pound advanced to a 1-1/2-month high of 0.8861 against the euro, reversing from a low of 0.8901 hit at 4:15 am ET. The pound is seen finding resistance around the 0.87 area.

Looking ahead, U.S. housing starts and building permits for August are scheduled for release in the New York session.

At 9:00 am ET, the European Central Bank President Mario Draghi speaks at an event hosted by the Jacques Delors Institute, in Berlin.

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