Pound holds 8-week high ahead of GDP data, US GDP and FOMC in focus

The UK currency showed strength ahead of the Q1 GDP data extending the previous day's gains and hovering near an eight-week high.

GBP/USD was at 1.5244, off an intra-day high of 1.5262, but up from the previous close of 1.5237. The pair had touched a high of 1.5263 on Monday, its highest since 5 March.

Sterling has been keeping an upward trend after turning north from the six-year low of 1.4565 touched on 13 April. At Tuesday's high, the UK currency was up more than 4.7% against the greenback.

Consensus estimate for the UK GDP for the first quarter of this year is for 2.6% from a year earlier, slower than the 3% growth rate recorded for the previous quarter. The sequential growth rate is seen falling to 0.5% from 0.6%.

The other two data releases due at 8.30am GMT are the index of services and BBA mortgage approvals.

Market expectations for the services index for the three months to February is 0.7%, slower than the 0.8% in January. However, analysts have forecast a rise in the mortgage approvals in March to 37,900 from 37,300 in February.

The two important US data due later in the day are S&P/Case-Shiller home price index, which is predicted to have risen to 4.7% year-on-year in February from 4.6% in January. The US consumer confidence for April meanwhile is seen rising to 102.5 from last month's 101.3.

That said, the big event all the markets look forward to is the FOMC rate decision late on Wednesday, but the US GDP data that will be released earlier will help set the tone for what needs to be expected from the Fed.