The pound advanced against its major counterparts in the European session on Tuesday, as traders awaited a slew of central bank decisions as well as U.K. inflation data for more clues on the policy outlook.
The Federal Reserve will begin its two-day policy meeting later today, with the markets widely expecting the central bank to keep rates on hold when it delivers its decision on Wednesday.
U.K. inflation data will be released on Wednesday. Headline annual inflation is seen rising to 7 percent in August, from 6.8 percent in the previous month.
But core inflation is seen edging down to 6.8 percent, from 6.9 percent a month earlier.
The Bank of England is expected to lift rates by 25 basis points at its monetary policy meeting on Thursday.
The pound climbed to 1.2422 against the greenback and 183.45 against the yen, setting 4-day highs. The currency is seen facing resistance around 1.27 against the greenback and 188.00 against the yen.
The pound rose to a 4-day high of 1.1125 against the franc, up from an early low of 1.1085. The pound may challenge resistance around the 1.13 level.
The pound rebounded to 0.8524 against the euro, from a previous multi-week low of 0.8536. Next key resistance for the currency may be located around the 0.84 level.
