The British pound that dropped in early Wednesday Asian deals against other major currencies recouped its losses in the latter part of the session. The pound thus rose to a 1-week high against the euro and a 6-day high against the franc. Meanwhile, the pound recovered from near a 2-week low against the yen and a 13- 1/2 – month low against the dollar.

Traders are now likely to focus on the the Bank of England’s monetary policy meeting minutes for the month of May, which is slated for release at 4:30 am ET. The central bank had kept its benchmark rate at 0.50% and had maintained its asset purchase scheme at GBP 200 billion.

U.K. stocks opened lower today on concerns over tighter regulation as Germany banned short-selling of some bonds.

Germany’s BaFin financial-services regulator temporarily banned naked short selling and naked credit-default swaps of euro-area government bonds. The ban also applies to naked short selling in shares of 10 banks and insurers that will last until March 31, 2011, BaFin said yesterday in an e-mailed statement.

BaFin said it was taking the step because of “exceptional volatility” in euro-area bonds. “Massive” short-selling was leading to excessive price movements which “could endanger the stability of the entire financial system.”

U.K.’s FTSE 100 index is currently trading at 5,227.59 – down 79.86 points or 1.51% over its previous close.

At 3:00 am ET Wednesday, the pound reached 132.40 against the yen, up from near a 2-week low of 130.45 hit in early Asian deals. If the UK currency advances further, it may likely target the 134.8 level. The pound-yen pair that closed yesterday’s trading at 132.13 is currently worth 132.02.

Japan’s industrial production grew 1.2% in March from the previous month, a final report issued by the Ministry of Economy, Trade and Industry showed today. March’s growth was sharply revised from 0.3%. Annually, production surged 31.8%.

The pound that fell to a 13 – 1/2 -month low of 1.4241 against the dollar in early Wednesday Asian deals at 9:50 pm ET recovered in the latter part of the session. The pound-dollar pair is presently trading at 1.4360, compared to yesterday’s closing value of 1.4325. The near term resistance for the pound is seen around the 1.450 level.

The U.S. CPI for April has been slated for release in the New York morning.

The Federal Reserve is scheduled to release the minutes of its April 27th-28th Federal Open Market Committee meeting at 2 pm ET.

The pound is currently trading at a 6-day high of 1.6497 against the Swiss franc and a 1-week high of 0.8497 against the euro, compared to early Asian session lows of 1.6389 and 0.8555, respectively. If the pound climbs further, it may target 1.670 against the franc and 0.845 against the euro. The pound-franc pair closed yesterday’s trading at 1.6461 and the euro-pound pair at 0.8512.

The euro declined as Germany’s Federal Statistical Office announced today that the number of persons in employment dropped by 107,000 or 0.3% in the first quarter from the previous year, compared to the 0.4% fall in the previous quarter. The number of employed totaled 39.8 million in the first quarter, smaller than the 40.6 million in the previous quarter.

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