FX round-up: Cable slips ahead of Fed

Cable was dragged lower by US dollar strength ahead of the Fed's rate-setting meeting later in the day and in the wake of a stronger-than-expected reading on consumer prices Stateside.

Excluding food and energy, what economists call 'core' inflation, the cost of living in the States increased at a 2.3% year-on-year pace in February, up from the 2.2% clip seen in the month before. That was also a tenth of a percentage point more than economists had penciled in.

As of 17:37 GMT euro/dollar was down by 0.31% to 1.1073, dollar/yen up by 0.51% to 113.76 and cable off by 0.43% to 1.4089.

In the UK, the Office for Budget Responsibility forecast the British economy would grow 2.0% in 2016, below the 2.4% it predicted in November, and the 2.2% seen for 2017.

Further afield, among emerging markets, the greenback gained 0.88% against the Brazilian real to reach 3.8000 on the back of reports that ex-President Luis Inacio Lula da Silva had accepted a cabinet post, a move which may have been interpreted as increasing the odds for social and political strife in South America's largest economy.

Some observers believed Lula had been offered the position to put him outside the reach of a legal inquiry into alleged political kick-backs.

Furthermore, according to a report in Valor Economico the possibility existed that Lula's arrival might lead to changes at the helm of Brazil's central bank.

The Aussie drifted lower by 0.27% to 0.7436.

Acting as a backdrop, three-month copper futures edged higher by 0.1% to $4,940 per metric tonne in LME trading, while iron futures slipped 0.1% to finish the day at $64 per tonne on the Dalian Commodities Exchange.

Overnight, China's National People's Congress drew to a close but for analysts at Capital Economics it left them with a sweet-and-sour aftertaste.

Chinese authorities indicated that fiscal measures would be front-loaded and flagged a bias towards further easing of monetary policy, which were both positives for near-term growth.

Nonetheless, and with a view to the medium-term, the government "still shows little willingness to tolerate the pain associated with significant change" associated with reforming and restructuring the bloated state sector.