The pound gained ground against the other major counterparts in the European session on Tuesday amid risk appetite on some upbeat earnings results and M&A news, as well as data showing a decline in U.K. budget deficit for the financial year 2016-17.

Data from the Office for National Statistics showed that the British government limited its budget deficit for the financial year 2016-17 almost within its targets and the figure hit the lowest level seen since the financial crisis.

In the financial year ending March 2017, public sector net borrowing decreased by GBP 20 billion to GBP 52.0 billion. This was the lowest deficit since the financial year ending March 2008 and slightly above the Office for Budget Responsibility's estimate of GBP 51.7 billion.

European share rose, with some encouraging earnings and merger and acquisition activity lifting sentiment. Receding political worries over France after Emmanuel Macron's victory in the first round of Presidential election also continued to buoy risk sentiment.

The pound held steady against its major rivals in the Asian session, with the exception of the yen.

The pound rose to 141.76 against the yen, from a 4-day low of 140.06 hit at 7:45 pm ET. The pound-yen pair is seen finding resistance around the 143.00 region.

Data from the Bank of Japan showed that Japan's corporate service prices rose 0.8 percent on year in March.

That was unchanged from the February reading and in line with expectations.

The pound reversed from an early 1-week low of 0.8510 versus the euro, rising to 0.8478. Further uptrend may take the pound to a resistance around the 0.82 area.

In an interview with the Austrian newspaper Der Standard, the European Central Bank policymaker Ewald Nowotny said that uncertainty about the future measures of the Trump administration is particularly worrying and the problems from Brexit may be underestimated as of now, both posing political risks for the European economy.

"One of our interlocutors in Washington told us that Trump and his team did not expect to win," Nowotny said.

The pound bounced off to 1.2830 against the greenback and 1.2766 against the franc, from its early lows of 1.2775 and 1.2722, respectively. The pound is poised to locate resistance around 1.32 against the greenback and 1.31 against the franc.

Looking ahead, U.S. S&P/Case-Shiller home price index and Federal Housing Finance Agency's house price index for February, new home sales for March and consumer confidence for April are due in the New York session.

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