2024.01.1015:49:00UTC+00Pound Advances Against Most Majors

The pound was higher against its most major counterparts in the New York session on Wednesday, as investors awaited key inflation reports to help determine the Fed's policy path.

Reports on consumer and producer price inflation, which are due to be released on Thursday and Friday, respectively, could have a significant impact on the outlook for interest rates.

With economists expecting the reports to show slowdowns in the annual rate of core price growth, the data could bolster optimism about near-term rate cuts by the Federal Reserve.

In his testimony before the UK Treasury Select Committee, Bank of England Governor Andrew Bailey said that the conflict in the Middle East had not hurt the economy so far.

"From an economic point of view - if you take the oil price, which is an obvious place to look - it hasn't actually had the effect that I sort of feared it might," Bailey added.

The pound edged up to 1.2740 against the greenback, from an early 2-day low of 1.2686. The pound is likely to test resistance around the 1.31 level.

The pound advanced to a 2-week high of 1.0857 against the franc and a 5-week high of 185.51 against the yen, off its early lows of 1.0814 and 183.39, respectively. The pound may find resistance around 1.13 against the franc and 189.00 against the yen.

In contrast, the pound eased against the euro and was trading at 0.8613. This may be compared to a previous 2-day low of 0.8616. The pound is poised to challenge support around the 0.88 level.