Investing.com – The pound edged lower against the broadly stronger dollar on Wednesday despite data showing that the U.K. unemployment rate fell to its lowest since late 2008 in the three months to May.
GBP/USD touched session lows of 1.7116, down from around 1.7107 ahead of the data.
Cable was likely to find support at the 1.7100 level and resistance at 1.7190, Tuesday’s high and the strongest since October 2008.
The Office for National Statistics said that the claimant count, or the number of people claiming unemployment benefit, fell by 36,300 in June, compared to expectations for a decline of 27,000.
May’s figure was revised to 32,800 from a previously reported decline of 27,400.
The unemployment rate declined to 6.5% in the three months to May, from 6.6% in the previous three months.
The robust employment report added to indications that the economic recovery in the U.K. is deepening, fuelling expectations that the Bank of England will hike rates before the end of the year.
However, the report showed that growth in real wages remains weak.
Average weekly earnings, excluding bonuses, rose by an annualized 0.7% in the three months to May, the slowest since record began in 2001. The annual rate of inflation over the same period was 1.6%.
The dollar remained broadly stronger after Federal Reserve Chairwoman Janet Yellen indicated Tuesday that interest rates could rise sooner than expected if the economy continues to improve.
Ms. Yellen said interest rates could rise more quickly if the labor market was to improve more quickly than expected. However, the Fed chair also said that if the economic recovery disappoints monetary policy would remain accommodative.
The remarks came during testimony to the Senate Banking Committee in Washington.
Ms. Yellen said the economy is continuing to improve but added that the recovery is not yet complete and reiterated that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends.
Elsewhere, sterling hit fresh 22-month highs against the euro, with EUR/GBP dipping 0.11% to 0.7904, the lowest since September 2012.