Investing.com – The pound jumped to three-week highs against the dollar on Wednesday after data showed that the U.K. unemployment rate fell to 7.1% in November, increasing pressure on the Bank of England to raise interest rates.
GBP/USD hit 1.6547, the highest since January 2 and was last up 0.39% to 1.6539.
Cable is likely to find support at 1.6450, the session low and resistance at 1.6602, the high of January 2 and a 28-month high.
The Office for National Statistics said that the rate of unemployment in the U.K. fell to 7.1% in the three months to November, to stand just above the 7% threshold at which the Bank of England has said it would start to consider hiking interest rates. It was the largest drop in unemployment since 1997 the ONS said.
Analysts had expected the jobless rate to fall to 7.3% from 7.4% in the three months to October.
The ONS said the number of people claiming jobless benefits fell by 24,000 in December, compared to expectations for a decline of 35,000.
The average earnings index rose by a seasonally adjusted 0.9% in November, compared to expectations for a 1% increase, after rising by 0.9% in the previous month.
The minutes of the Bank of England's January meeting said unemployment will hit the 7% threshold "materially earlier" than forecast, but reiterated that policymakers saw no immediate need to raise rates if the threshold is hit soon. The minutes also showed that policymakers voted unanimously to keep monetary policy on hold this month.
Sterling rose to one-year highs against the euro, with EUR/GBP down 0.49% to 0.8189.