Investing.com - The pound was at two-week lows against the dollar on Wednesday after as investors awaited the U.K. annual budget later in the day, but losses were held in check after the latest employment report showed a pick-up in wage growth.
GB/USD was down 0.36% at 1.4100 from around 1.4124 ahead of the release of the jobs data.
The Office for National Statistics reported that Britain’s unemployment rate remained steady at a 10-year low of 5.1%, in line with forecasts.
The claimant count, which measures the number of people receiving unemployment benefits, fell by 18,000 in February to 717,000.
Wage growth picked up slightly, with earnings, including bonuses, up 2.1% from a year earlier in the three months to January from 1.9% in the three months to December.
Economists had forecast an increase of 2.0%.
Excluding bonuses, wages rose 2.2%, up from 2.0% in the last three months of 2015 and compared to a forecast of 2.1%.
Sentiment on sterling remained fragile with Britain's Chancellor George Osborne to deliver the country's annual budget later in the day.
The pound was under pressure as uncertainty over the outcome of a looming referendum on Britain’s future in the European Union continued to weigh.
The euro pushed higher against sterling, with EUR/GBP rising 0.23% to 0.7868.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 96.87 as investors looked ahead to the outcome of the Federal Reserve’s latest policy meeting later in the day.
Most investors were expecting the Fed to hold interest rates steady at the conclusion of its meeting, given recent signs of weakness in the global economy.
But the U.S. central bank was likely to signal that rates will rise fairly soon as long as U.S. inflation and jobs continue to strengthen.
Most economists are currently expecting the first rate hike of this year in June after the Fed raised interest rates for the first time in almost a decade in December.
Higher interest rates would make the dollar more attractive to yield seeking investors.
Fed Chair Janet Yellen’s post policy meeting news conference will be closely watched for clues about interest rates’ future path.