Investing.com - The pound erased gains against the dollar on Wednesday after data showed that the U.K. unemployment rate unexpectedly ticked higher in the three months to December.
GBP/USD dipped 0.04% to 1.6677, down from 1.6720 ahead of the data.
Cable was likely to find support at 1.6615 and resistance at 1.6740, Tuesday’s high.
The drop in the pound came after the Office for National Statistics said that the rate of unemployment in the U.K. ticked up to 7.2% in the three months to December from 7.1% in the previous three months.
Analysts had expected the jobless rate to remain unchanged.
The number of people claiming unemployment benefits in the U.K. declined more-than-expected in January, the ONS said.
The claimant count fell by a seasonally adjusted 27,600 last month, compared to expectations for a decline of 20,000 people. December’s figure was revised to a drop of 27,700 people from a previously reported decline of 24,000.
Meanwhile, the average earnings index rose by a seasonally adjusted 1.1% in December, compared to expectations for a 1% increase, after rising by 0.9% in the previous month.
Separately, the minutes of the Bank of England’s February meeting showed that officials did not hold a vote before updating forward guidance on rates this month, indicating a unanimous belief that an adjustment was necessary.
The bank updated its forward guidance last week, saying it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it sees happening in 2015.
The bank had previously pledged not to consider a rate increase until the unemployment rate dropped below 7%, but that target is now set to be reached much faster that the bank had anticipated.
Elsewhere, the euro was little changed against sterling, with EUR/GBP dipping 0.02% to 0.8244, up from lows of 0.8222.