Pound Rises As U.K. Retail Sales Growth Accelerates

The British pound strengthened against other major currencies in the early European session on Wednesday, after data showed that U.K. retail sales increased at a faster pace in August. Data from the Office for National Statistics showed that U.K. retail sales volume including auto fuel advanced 1 percent in August from July, the biggest growth in four months and exceeded the expected rate of 0.2 percent and July's increase of 0.6 percent.

Year-on-year, retail sales volume growth improved to 2.4 percent from 1.4 percent. Economists had forecast a 1.2 percent increase. Sales have increased for the 52nd consecutive month.

Investors await the U.S. Federal Reserve's monetary policy decision due later in the day, with many expecting no change in interest rates.

That said, the accompanying statement may offer the details of how the central bank plans to start shrinking its $4.5 trillion balance sheet.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading, the pound rose to 2-day highs of 1.3608 against the U.S. dollar, 1.3057 against the Swiss franc and 0.8826 against the euro, from early lows of 1.3492, 1.2974 and 0.8888, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.37 against the greenback, 1.31 against the franc and 0.86 against the euro.

Against the yen, the pound edged up to 151.52 from an early low of 150.49. The pound may test resistance near the 152.00 region.

Looking ahead, U.S. existing home sales data for August and crude oil inventories data are slated for release in the New York session.

At 2:00 pm ET, the Federal Reserve will announce its decision on monetary policy. The Fed is expected to hold rates at 1.25 percent.