Investing.com - The pound was lower against the broadly stronger dollar on Wednesday, shrugging off a solid U.K. jobs report as investors’ reassessed prospects that the Federal Reserve would soon raise interest rates.
The Office for National Statistics reported that the claimant count, which measures the number of people receiving unemployment benefit, fell by 2,400 in April, against expectations for an increase of 4,300.
March’s claimant count was revised up to 14,700, the biggest monthly increase since September 2011.
The U.K. unemployment rate remained stable at 5.1%, in line with economists’ forecasts.
The number of people in work rose by 44,000, bringing the employment rate to a record high of 74.2%
Wage growth continued to pick up, with average weekly earnings rising by 2.0% in the last three months, up from 1.9% in the three months to December.
But excluding bonuses, salaries rose by 2.1%, slowing from 2.2% the previous quarter.
GBP/USD was down 0.8% at 1.4406 from around 1.4435 ahead of the job report.
Sterling was little changed against the euro, with EUR/GBP at 0.7821.
Demand for the dollar continued to be underpinned after data showing that U.S. consumer prices rose at the fastest rate in more than three years in April bolstered expectations for another interest rate hike later this year.
Prices rose by 0.4% in April, the biggest one-month gain since February 2013, the Labor Department said on Tuesday.
Separate reports showed that housing starts and industrial production also rose strongly last month.
The greenback received an additional boost after Federal Reserve officials said rates could raise two to three times this year.
Dallas Fed President Robert Kaplan said he will push for an interest-rate hike at the Fed's upcoming policy meetings.
Meanwhile, Atlanta Fed President Dennis Lockhart said at an event in Washington that he still assumes there will be two to three rate hikes between now and December
San Francisco Fed President John Williams, in a joint appearance with Lockhart in Washington, echoed the remarks, saying two to three interest rate hikes this year "seems reasonable".
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.39% at one-month highs of 94.92.