Pound Rises As U.K. Jobless Rate Falls

The British pound strengthened against other major currencies in the early European session on Wednesday, after data showed that the U.K. unemployment rate declined in the second quarter.

Data from the Office for National Statistics showed the ILO unemployment rate fell to 4.4 percent in the second quarter from 4.9 percent a year ago. This was the lowest since 1975. Economists had forecast a rate of 4.5 percent, the same as seen in three months to May.

The number of unemployed decreased by 57,000 from first quarter to 1.48 million. The employment rate came in at 75.1 percent, the highest since comparable records began in 1971.

Average earnings including bonuses increased 2.1 percent annually, faster than the expected 1.8 percent.

In July, the claimant count held steady at 2.3 percent. The number of people claiming unemployment benefits decreased by 4,200 from June.

Meanwhile, the European stocks rose as higher commodity prices lifted mining and on Fed rate hike expectations and flash estimate from Eurostat showed the euro area economy expanded as initially estimated in the second quarter.

On a yearly basis, GDP growth has been revised up slightly to 2.2 percent from 2.1 percent, after 1.9 percent growth in the first quarter.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading, the pound rose to 0.9082 against the euro and 1.2901 against the Swiss franc, from an early 10-month low of 0.9143 and a 5-week low of 1.2842, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.89 against the euro and 1.31 against the greenback. Against the yen and the Swiss franc, the pound edged up to 143.09 and 1.2582 from early lows of 142.23 and 1.2498, respectively. The pound may test resistance near 145.00 against the yen and 1.27 against the franc.

Looking ahead, U.S. housing starts and building permits, both for July, and U.S. crude oil inventories data are slated for release in the New York session.

At 2:00 pm ET, U.S. Federal Reserve is scheduled to publish minutes of its most recent monetary policy meeting.