EURGBP Euro vs Pound Sterling

The British pound retreated from recent highs against the other major currencies in the early European session on Wednesday, after the Bank of England Deputy Governor Minouche Shafik said that more easing will be required at some point to ensure that a slowdown in economic activity does not turn into more pernicious.

Speaking at the Bloomberg Markets Most Influential Summit in London, the BoE Deputy Governor Shafik said, "It seems likely to me that further monetary stimulus will be required at some point in order to help ensure that a slowdown in economic activity doesn't turn into something more pernicious."

She also added that the central bank could also expand its asset purchase program.

She also noted that U.K. is experiencing a "sizable economic shock" in the wake of Brexit vote.

The currency rose earlier on risk appetite, as European stocks advanced on higher oil prices. Traders await the weekly U.S. crude oil inventory data from U.S. Department of Energy's Energy Information Administration (EIA) due later in the day. The API report has shown a second-straight, unexpected weekly decline in stockpiles.

Traders also await a slew of speeches by Federal Reserve officials later today, including an appearance by Chair Janet Yellen.

San Francisco Federal Reserve Bank President John Williams said on Tuesday he believes the U.S. economy can handle an interest rate rise. Fed Vice Chairman Stanley Fischer also said that U.S. interest rates should rise over time.

In the Asian trading, the pound held steady against its major rivals.

In the early European session, the pound fell to 1.2981 against the U.S. dollar, 1.2609 against the Swiss franc and 0.8639 against the euro, from recent 5-day highs of 1.3030, 1.2673 and 0.8589, respectively. If the pound extends its downtrend, it is likely to find support around 1.28 against the greenback, 1.24 against the franc and 0.87 against the euro.

Against the yen, the pound dropped to 130.82 from a recent high of 131.18. The pound may test support near the 129.00 region.

Looking ahead, U.S. durable goods orders for August and U.S. crude oil inventories data are set to be published in the New York session.

At 10:00 am ET, Federal Reserve Chair Janet Yellen will testify on supervision and regulation before the Committee on Financial Services, in Washington DC.

Ten minutes later, Federal Reserve Bank of St. Louis President James Bullard Fed Bank of Chicago President Charles Evans will deliver speeches on the Community Banking in the 21st Century Conference hosted by the Federal Reserve Bank of St. Louis.

At 10:30 am ET, European Central Bank President Mario Draghi is expected to speak about current developments in the euro area at the German Bundestag, in Berlin.

At 4:30 pm ET, Federal Reserve Bank of Cleveland President Loretta Mester is scheduled to speak before the Greater Cleveland Partnership, in Cleveland.

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