Pound Higher As U.K. GDP Beats Estimates

(RTTNews) - The pound appreciated against its major rivals in the European session on Wednesday, after a data showed that the economy expanded faster than expected in May.

Data from the Office for National Statistics showed that GDP rose 0.5 percent on month in May, after a revised decline of 0.2 percent in April. Economists had expected a growth of 0.1 percent.

Construction output grew by 1.5 percent in May, following 0.3 percent growth in April. Economists had expected a reading of 0.2 percent.

Industrial production increased 0.9 percent in May, following a revised 0.1 percent drop in the previous month. Economists had forecast a flat reading for the month.

Investors awaited U.S inflation data due later today for more clues on future rate hikes.

The pound firmed to 2-day highs of 163.72 against the yen and 1.1936 against the greenback, up from its early lows of 162.35 and 1.1870, respectively. The pound is likely to find resistance around 166.00 against the yen and 1.22 against the greenback.

Reversing from its previous lows of 1.1646 against the franc and 0.8448 against the euro, the pound moved up to a 2-day high of 1.1712 and near a 2-month high of 0.8403, respectively. If the pound rises further, 1.21 and 0.82 are likely seen as its next resistance levels against the franc and the euro, respectively.

Looking ahead, Eurozone industrial production for May is due in the European session.

U.S. CPI and monthly budget statement for June, as well as Fed Beige book report are scheduled for release in the New York session.

At 10 am ET, the Bank of Canada will announce its interest rate decision. The BoC is widely expected to raise interest rate to 2.25 percent from 1.5 percent.