Pound Recovers Against Most Majors; U.K. Trade Data Eyed

In early European deals on Tuesday, the British pound recovered its previous session's losses against the currencies of Japan, Europe and Switzerland. But the pound showed choppy trading versus the dollar.

Investors now focus on the U.K. trade data for January, which is due at 5:30 am ET. The visible trade deficit is seen widening to GBP 7.9 billion from GBP 7.11 billion in December.

The pound is now worth 0.8394 against the euro, compared to near a 2-week low of 0.8426 hit in early Asian deals. The near term resistance level for the pound is seen at 0.835.

The pound that fell to near a 2-week low of 1.4317 against the franc at 3:20 am ET rebounded thereafter. At present, the pound-franc pair is worth 1.4375 with 1.445 seen as the next upside target level.

Swiss producer and import prices declined less than expected by economists in February, the Federal Statistical Office said. Year-on-year, the producer and import price index fell 1.9 percent, slower than economists' forecast for a 2.4 percent decline. Compared to the previous month, the index rose 0.8 percent, while expectations were for a 0.2 percent increase.

After hitting a low of 128.30 against the yen at 1:35 am ET, the pound gained. The pound-yen pair is currently trading at a 4-day high of 129.50. The next upside target level for the pound is seen at 129.8.

The Bank of Japan today decided to expand its loan scheme aimed at supporting economic growth by JPY 2 trillion following the conclusion of its March monetary policy meeting. At the same time, the central bank kept its monetary policy unchanged.

The measure was largely aimed at tackling deflation and establishing a new basis for economic growth, the central bank said.

But the pound showed choppy trading against the dollar today, moving between 1.564 and 1.566.

Looking ahead, German ZEW economic sentiment index for March is expected at 6 am ET.

The U.S. advance retail sales for February and business inventories for January are expected in the New York morning session.

The Federal Open Market Committee is scheduled to begin a 1-day meeting to discuss the near term direction of monetary policy. The monetary policy-setting arm of the Federal Reserve is set to release a post-meeting policy statement at 2:15 pm ET.