The pound firmed against its major counterparts in the European session on Wednesday, as European stocks rose on hopes that major central banks will lower borrowing costs early next year.

Traders expect inflationary pressures to ease further across the world, paving way for potential rate cuts in 2024.

Fed is expected to cut interest rate as early as March 2024 amid lower-than-expected inflation and other soft economic data.

Growing rate cut expectations by the Fed have undermined the U.S. dollar and treasury yields in recent weeks.

The U.S. economic calendar is light today, while weekly jobless claims and pending home sales are due on Thursday.

The pound climbed to an 8-day high of 1.2758 against the greenback and a 1-week high of 181.92 against the yen, off its early lows of 1.2698 and 180.99, respectively. The currency is poised to find resistance around 1.31 against the greenback and 186.00 against the yen.

The pound rebounded to 0.8674 against the euro and 1.0879 against the franc, from an early multi-week low of 0.8698 and a multi-month low of 1.0830, respectively. The pound may find resistance around 0.84 against the euro and 1.13 against the franc.

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