The pound drifted higher against its major counterparts in the European session on Wednesday, after EU Chief Negotiator Michel Barnier remarked that the bloc is committed to reach an agreement on the Brexit in the coming days.

Speaking to the European Parliament in Brussels, Barnier said that a future trade deal with Britain was "within reach" if both sides show willingness to compromise in the difficult areas.

"An agreement is within reach if both sides are willing to work constructively, compromise and working to make progress on the basis of legal texts and if we are able in the coming days to resolve the sticking points," Barnier said. Barnier added that the EU is "ready to discuss all subjects on the basis of legal texts" as requested by No 10.

But he insisted that there would not be a trade deal without a fair solution for fishermen on both sides.

In economic releases, U.K. consumer price inflation accelerated in September as restaurant and café prices increased driven by the Eat Out to Help Out scheme, a government report showed.

Inflation climbed 0.5 percent annually in September, up from the 0.2 percent increase seen in August. That came in line with expectations.

Another official report showed that output prices continued to fall in September.

U.K. public sector net borrowing increased by GBP 28.4 billion from the last year to GBP 36.1 billion in September due to the substantial increases in borrowing amid the coronavirus pandemic, separate data showed. This was the third highest borrowing in any month since records began in 1993. The pound spiked up to a 2-day high of 0.9067 against the euro from Tuesday's closing value of 0.9128. The next possible resistance for the pound is seen around the 0.88 level.

The pound hit 1.3072 against the greenback, its highest level since October 12. Should the currency rises further, 1.34 is seen as its next resistance level.

The pound climbed to a 2-day high of 137.20 against the yen, compared to 136.57 hit late New York Tuesday. Immediate resistance for the pound is likely seen around the 141.00 level.

The pound reached as high as 1.1816 against the franc, setting a 2-day peak. On the upside, 1.22 is likely seen as its next resistance level.

Looking ahead, Canada retail sales for August, consumer inflation and new housing price index for September and U.S. Federal Reserve's Beige book report will be featured in the New York session.

Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Nov 2020 to Dec 2020 Click Here for more Sterling vs Yen Charts.
Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Dec 2019 to Dec 2020 Click Here for more Sterling vs Yen Charts.