US economic growth rebounded during the final three months of 2006, powered by resurgent consumer spending due to cheaper oil prices and rising wages.

In foreign exchange trading early on Wednesday, the pound gained from

$1.9628 to $1.9630 while the euro was valued at 66.2p and $1.29433.

The US economy grew two per cent in the third quarter of 2006, with economists projecting a three per cent increase in GDP during the final quarter of the year.

The prediction, based on median expectations of 77 economists surveyed by Bloomberg, comes ahead of today's rate rise decision by the US Federal Reserve today.

The result comes despite the US housing slowdown which some had expected to brake growth.

The fed is expected to hold rates today and has said that high inflation is of more concern than a slowdown in growth.

"Growth is resilient despite the slowdown in housing," said Michael Feroli of JPMorgan Chase. "The Fed has become less worried about growth and the repercussions of the housing downturn."