Investing.com - The pound extended gains against the dollar on Wednesday after data showing that the U.K. unemployment rate fell to a new seven-year low and wage growth continued to outpace inflation.
GBP/USD was up 0.75% to 1.5361 from around 1.5301 ahead of the jobs report.
The Office for National Statistics said the jobless rate ticked down to 5.4% in the three months to August from 5.5% in the preceding three-month period.
It was the lowest unemployment rate since the second quarter of 2008.
The number of people claiming unemployment benefits rose by 4,600, bringing the total to 796,000. Economists had forecast a decline of 2,100.
Average earnings, excluding bonuses, rose at an annual rate of 2.8% in the three months to August, slowing slightly from 2.9% in July. Economists had expected a rise to 3%.
Pay, including bonuses rose by 3.0%, up from 2.9% in July, but slightly below forecasts for an increase of 3.1%.
Data on Tuesday showed that the annual rate of inflation in the U.K. fell 0.1% in September.
The Bank of England has said it is closely watching wage growth as it considers when to start raising interest rates.
Sterling was also higher against the euro, with EUR/GBP down 0.49% at 0.7425.
In the euro zone, data on Thursday showed that industrial production fell 0.5% in August after an upwardly revised 0.8% increase in July.
The single currency had jumped to eight-month peaks against the pound on Tuesday after the weak U.K. inflation report.
The dollar remained broadly weaker after weak Chinese inflation data fueled expectations that the Federal Reserve will delay hiking rates for longer.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.27% to three-and-a-half week lows of 94.55.