Pound Falls As U.K. Jobless Rate Increases

The pound weakened against its key counterparts in early European deals on Wednesday, following a data showing an uptick in U.K. jobless rate in the fourth quarter.

Data from the Office for National Statistics showed that the ILO unemployment rate rose by 0.1 percentage points to 4.4 percent in three months to December. In the same period of last year, the rate was 4.8 percent.

The rate was forecast to remain unchanged at 4.3 percent.

The number of unemployed rose by 46,000 from the September quarter to 1.47 million.

Further undermining the currency was risk aversion, as European stocks tracked Wall Street lower in the wake of a rising dollar, disappointing results from Walmart and climbing bond yields on expectations of a faster pace of interest rate increases from the Federal Reserve.

The currency traded mixed in the Asian session. While it rose against the yen and the franc, it held steady against the euro. Against the greenback, it declined.

Pulling away from an early near a 2-week high of 150.93 against the yen, the pound edged down to 149.78. The pound is poised to challenge support around the 147.00 level.

Data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity growth halved in December.

The all industry activity index rose 0.5 percent month-on-month in December, following November's 1 percent increase. Nonetheless, this was the third consecutive increase in activity and bigger than the expected 0.4 percent rise.

The pound slipped to a 1-week low of 1.3930 against the dollar, from a high of 1.4008 seen at 7:30 pm ET. Further downtrend for the pound is likely to see it finding support around the 1.38 mark.

The U.K. currency reversed from an early high of 1.3119 against the Swiss franc, dropping to 1.3061. If the pound extends drop, 1.28 is seen as its next support level.

Having advanced to 0.8806 against the euro at 2:30 am ET, the pound reversed direction and fell to 0.8847. The pound is seen finding support around the 0.90 mark.

Flash data from IHS Markit showed that Eurozone private sector growth continued to rise at a steep pace in February, albeit with the rate of expansion cooling from the near 12-year high in January.

The composite output index dropped to 57.5 from 58.8 in the previous month. The score was forecast to fall to 58.4.

Looking ahead, Markit's U.S. manufacturing PMI for February and existing home sales for January are scheduled for release in the New York session.

The Bank of England Governor Mark Carney, Deputy Governor Ben Broadbent and policy makers Andy Haldane and Silvana Tenreyro will testify on inflation and the economic outlook before the Treasury Select Committee at 9:15 am ET.

At 2:00 pm ET, the Fed minutes from January 30-31 meeting are due.