The British pound rebounded from early lows against other major currencies in the European session on Wednesday, after data showed that the nation's Consumer Price Index for March grew more than what economists had expected, making it likely to push back market expectations of an early rate cut.

Data from the Office for National Statistics showed that U.K. consumer price inflation softened to 3.2 percent in March from 3.4 percent in February. However, this was slightly above the forecast of 3.1 percent.

The March inflation was the lowest since September 2021, when it was 3.1 percent.

At the same time, core inflation that excludes energy, food, alcohol and tobacco, eased to 4.2 percent from 4.5 percent in February. The rate was seen at 4.1 percent.

On a monthly basis, the consumer price index moved up 0.6 percent, the same as in February.

Another data from the ONS showed that input prices fell 2.5 percent in the year to March, worse than a revised fall of 2.2 percent in the year to February.

Meanwhile, factory gate inflation rose to 0.6 percent from 0.4 percent in the previous month.

On a monthly basis, input prices fell 0.1 percent, but output prices rose 0.2 percent in March.

European stocks traded higher after reports that the United States and the European Union are planning to impose new sanctions on Iran, following its weekend attack on Israel.

Israel has vowed to retaliate against Iran, but officials haven't said how or when they might strike.

Israel's Foreign Minister Israel Katz said a diplomatic offensive against Iran would be carried out alongside Israel's military response.

Federal Reserve Chair Jerome Powell cautioned that persistently elevated inflation will likely delay any rate cuts until later this year.

The International Monetary Fund said on Tuesday that a resilient global economy is set for steady growth in the next two years, but the growth will be uneven amid persistent risks.

In the Asian session today, the sterling traded lower against its major rivals.

In the European trading now, the pound rose to a 2-day high of 1.2481 against the U.S. dollar, from an early low of 1.2417. The pound may test resistance near the 1.27 region.

Against the euro, the pound advanced to more than a 5-week high of 0.8520 from an early 2-day low of 0.8554. The next possible upside target for the pound is seen around 0.84 region.

The pound edged up to 192.82 against the yen and 1.1373 against the Swiss franc, from early lows of 192.01 and 1.1332, respectively. If the pound extends its uptrend, it is likely to find resistance around 194.00 against the yen and 1.15 against the franc.

Looking ahead, U.S. MBA mortgage approvals data, U.S. EIA crude oil data and U.S. Fed Beige book report are slated for release in the New York session.

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