The British pound weakened against other major currencies in the European session on Wednesday, after data showed that the U.K. consumer price inflation slowed unexpectedly in August.

Data from the Office for National Statistics showed that the U.K. consumer price index posted an annual increase of 6.7 percent in August after rising 6.8 percent in July. Inflation was expected to rise to 7.0 percent. Moreover, this was the weakest inflation since February 2022.

On a monthly basis, the CPI was up 0.3 percent, in contrast to the 0.4 percent fall in July. Prices were forecast to rebound 0.7 percent in August.

Another data from the ONS showed that the annual fall in output prices slowed to 0.4 percent from revised 0.7 percent in July. Prices were expected to drop 0.6 percent.

Similarly, input prices declined at a slower pace of 2.3 percent after falling 3.2 percent in the prior month. The pace of drop was also smaller than the expected 2.7 percent decrease.

Traders await the U.S. Federal Reserve's monetary policy announcement later in the day. While the Fed is set to leave its key interest rate unchanged at 5.5 percent, focus will be on what signals the U.S. central bank might send about its likely next actions.

Traders also look ahead to the policy meetings of the Bank of England, the Bank of Japan, the Swiss National Bank, the Norges Bank and the Riskbank this week for direction.

The pound held steady against its major counterparts in the Asian trading today.

In the European trading now, the pound fell to nearly a 4-month low of 1.2334 against the U.S. dollar and a 6-week low of 182.46 against the yen, from early highs of 1.2397 and 183.30, respectively. If the pound extends its downtrend, it is likely to find support around 1.21 against the greenback and 181.00 against the yen.

Against the euro and the Swiss franc, the pound slid to nearly a 6-week low of 0.8659 and nearly a 7-week low of 1.1071 from early highs of 0.8618 and 1.1128, respectively. The pound may test support near 0.87 against the euro and 1.09 against the franc.

Looking ahead, ECB's Isabel Schnabel will speak on current aspects of monetary policy at an event in Frankfurt at 5:00 am ET.

In the New York session, U.S. MBA mortgage approvals data and U.S. EIA crude oil data are slated for release.

At 8:00 am ET, ECB Board Member Elizabeth McCaul will deliver a speech on "Technology, data and innovation - Shaping the future of supervision" at ECB Supervision Innovators Conference "Technology and banking supervision connected" in Frankfurt, Germany.

Half-an-hour later, ECB Board Member Frank Elderson Elderson will speak at Springtij Forum 2023 in Terschelling, Netherlands.

At 2:00 pm ET, the U.S. Federal Reserve's announce its monetary policy. The Fed is set to leave its key interest rate unchanged at 5.5 percent.

Half-an-hour later, Federal Reserve Chair Jerome Powell will deliver a speech after the Fed's latest policy-setting meeting.

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