Pound Climbs Amid Risk Appetite

The pound advanced against its major counterparts in the European session on Tuesday amid risk appetite, as oil prices rebounded and investors reassessed the prospects for tax reform and regulation cuts from President Donald Trump.

Investors shrugged off U.S. President Donald Trump's failure on health care and turned hopeful that the White House will take a lead role in crafting legislation to overhaul the U.S. tax code, which has bi-partisan support across the country.

The first fundamental overhaul of the tax code in 30 years includes slashing corporate tax rates and massive tax cuts for the middle class.

The U.K. Prime Minister Theresa May will formally trigger Article 50 of the EU Treaty on Wednesday. The government will deliver a letter to the European council president Donald Tusk, the mechanism for starting the Brexit process.

Crude oil prices regained some ground due to bargain hunting, although uncertainty over the effectiveness of OPEC output deal limited gains.

The pound held steady against its major rivals in the Asian session, with the exception of the greenback.

Reversing from an early low of 1.2362 against the Swiss franc, the pound edged up to a 4-day high of 1.2417. The next possible resistance for the pound-franc pair is seen around the 1.28 zone.

The pound reversed from an early low of 1.2539 against the dollar, rising to 1.2596. Continuation of the pound's uptrend may see it challenging resistance around the 1.27 level.

The pound strengthened to a 4-day high of 0.8618 against the euro and a 6-day high of 139.40 against the yen, off its early lows of 0.8658 and 138.80,respectively. The pound is poised to find resistance around 0.84 against the euro and 142.00 against the yen.

Looking ahead, U.S. wholesale inventories for February, S&P/Case-Shiller home price index for January, consumer confidence and Richmond Fed's manufacturing index for March are due in the New York session.

The Bank of Canada Governor Stephen Poloz speaks at Durham College in Oshawa at 10:10 am ET.

The Federal Reserve Bank of Dallas President Robert Kaplan delivers speech at the Committee of Foreign Relations in Dallas at 1:00 pm ET.