Pound Advances On BoE Rate Hike Hopes

The pound was higher against its most major counterparts in the European session on Wednesday, as strong U.K. GDP data for August intensified hopes for a rate hike by the Bank of England before the end of the year.

Data from the Office for National Statistics showed that the UK economy recovered in August.

Gross domestic product grew 0.4 percent on month, but slightly slower than the economists' forecast of 0.5 percent.

On the production-side, services output grew 0.3 percent in August. Production output increased 0.8 percent, mainly because of the continued increase in the extraction of crude petroleum and natural gas.

Meanwhile, construction contracted again, with output down by 0.2 percent.

European stocks traded mixed ahead of U.S. inflation data that could shed more clues about the Fed's policy outlook.

The pound edged up to a session's high of 0.8473 against the euro, from a low of 0.8493 seen at 7:45 pm ET. On the upside, 0.83 is possibly seen as its next resistance level.

The pound climbed to a 2-day high of 1.3644 against the greenback and near a 4-month high of 154.96 against the yen, off its prior lows of 1.3576 and 154.11, respectively. The pound is likely to challenge resistance around 1.38 against the greenback and 156.00 against the yen.

In contrast, the pound pulled back to 1.2633 against the franc, from a high of 1.2665 hit at 4:25 am ET. The pound may challenge support around the 1.24 mark.

Looking ahead, U.S. inflation data for September is due in the New York session.

The Fed minutes from the September 21-22 meeting are set for release at 2:00 pm ET.