Pound Advances As U.K. GDP Tops Expectations

The pound climbed against its major counterparts in early European deals on Wednesday, after a data showed that U.K. economic growth and industrial production beat estimates in February, signaling some economic acceleration at the start of year.

Data from the Office for National Statistics showed that the UK economy grew 0.2 percent month-on-month in February, after rising 0.5 percent in the previous month. Economists had expected the growth to be flat.

On a 3-month-on-3-month basis, GDP rose 0.3 percent in February, unchanged from the previous month.

Separate data showed that industrial production was steady at 0.6 percent in February. Economists were looking for a 0.1 percent growth.

Manufacturing output grew 0.9 percent after an 0.8 percent rise in January. Economists had expected a 0.2 percent decline.

European Shares inched higher as investors awaited the EU's crucial Brexit summit as well as the European Central Bank's latest interest rate decision.

European Council president Donald Tusk is asking the EU to consider offering the UK a "flexible" delay to Brexit of up to a year, with the option of leaving earlier if a deal is ratified.

The currency has been trading in a positive territory against its major counterparts in the Asian session.

The pound strengthened to 0.8612 against the euro, from a low of 0.8634 hit at 5:15 pm ET. The next possible resistance for the pound is seen around the 0.85 level.

The pound appreciated to 1.3085 against the greenback, following a decline to 1.3042 at 5:15 pm ET. The pound is seen finding resistance around the 1.32 level.

The U.K. currency rose to 145.44 against the yen, after dropping to 144.93 at 5:00 pm ET. On the upside, 148.00 is possibly seen as the next resistance level for the pound.

Data from the Bank of Japan showed that Japan overall bank lending rose 2.4 percent on year in March, coming in at 535.367 trillion yen.

That follows the 2.3 percent annual increase in February.

The pound reversed from an early low of 1.3038 against the franc, rising to 1.3094. Next key resistance for the pound is seen around the 1.33 level.

Looking ahead, the European Central Bank announces its interest rate decision at 7:45 am ET. Economists expect the refi rate to be kept at 0.00 percent and the marginal lending facility rate at 0.25 percent.

In the New York session, U.S. CPI and monthly budget statement for March, as well as the Fed minutes from the March meeting are set for release.

At 11:50 am ET, Federal Reserve Governor Randal Quarles will give a speech about the progress on the transition to risk-free rates at the Financial Stability Board Roundtable in Washington DC.