The pound trimmed its early losses against its key counterparts in the European session on Wednesday, after the U.K. Chancellor of Exchequer Philip Hammond lifted up U.K. growth forecasts for this year and slashed public borrowing figures, reflecting optimism in the U.K. economy ahead of the Brexit talks that begin this month.

In its spring budget, the Office for Budget responsibility upgraded its growth forecasts for this year to 2 percent from earlier projection of 1.4 percent, reflecting the recent strength in the economy.

The British economy "has continued to confound the commentators with robust growth", Hammond said, adding that his country's growth was only second to that of Germany's among major advanced economies in 2016.

Borrowing forecasts for 2017-18 was lowered to GBP 58.3 billion and to GBP 40.8 billion for 2018-19. The forecast for 2021-22 was GBP 16.8 billion.

Overall public sector net borrowing as a percentage of GDP is predicted to fall from 3.8 percent last year to 2.6 percent this year, Hammond said. Borrowing is projected to be 0.7 percent in 2021-22, the lowest level in two decades.

The pound weakened on Tuesday following the release of disappointing Halifax house prices for February, as well as on worries over the May's ability to stick to the March-end deadline to start the withdrawal process.

The House of Lords on Tuesday voted to give parliament a meaningful vote on the final outcome of withdrawal from the 28-member EU, blocking attempts by May to trigger Article 50 by this month.

The pound slid 0.3 percent against the greenback and 0.2 percent each against the Swiss franc, the yen and the euro for the day.

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

Following the budget announcement, the pound reversed from an early near 2-month low of 0.8695 against the euro and bounced off to 0.8660. The next possible resistance for the pound is seen around the 0.84 area.

Figures from Destatis showed that Germany's industrial production recovered at a faster than expected pace in January.

Industrial output grew 2.8 percent in January from prior month, when it fell by revised 2.4 percent. Economists had forecast production to grow 2.6 percent after easing by initially estimated 3 percent in December.

The pound, having fallen to near a 2-month low of 1.2298 against the Swiss franc at 6:30 am ET, reversed direction with the pair trading at 1.2346. If the pound rises further, it may find resistance around the 1.25 region.

Data from the Federal Statistical Office showed that Swiss inflation accelerated to the fastest level in more than five years in February.

Consumer price inflation doubled to 0.6 percent in February from 0.3 percent in January. This was the second consecutive rise in prices and a similar pace of growth was last seen in June 2011.

Following a new 4-week low of 138.44 hit against the yen at 6:30 am ET, the pound rose back to 139.57.On the upside, the pound may locate resistance around the 141.00 zone.

Data from the Cabinet Office showed that Japan's gross domestic product expanded 0.3 percent on quarter in the fourth quarter of 2016 in final revision.

That missed forecasts 0.4 percent and was up from last month's preliminary reading of 0.2 percent. GDP gained 0.3 percent in Q3.

The pound showed a tepid recovery against the greenback, trading at 1.2174, after falling to nearly 2-month of 1.2139 before the release of budget statement. The pair was valued at 1.2200 when it ended Tuesday's trading.

Data from payroll processor ADP showed that private sector employment in the U.S. increased by much more than expected in the month of February.

ADP said private sector employment surged up by 298,000 jobs in February after jumping by an upwardly revised 261,000 jobs in January.

Looking ahead, U.S. wholesale inventories for January and crude oil inventories data are set to be released shortly.

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