BRUSSELS (dpa-AFX) - The pound declined against its major rivals in the early European session on Wednesday, as the U.K. employment dropped sequentially to more than a 2-year low in the third quarter.
Data from the Office for National Statistics showed that the number of people in employment fell by 14,000 to 32.06 million on quarter in the three months to September.
This is the biggest decline since April to June 2015 quarter.
Simultaneously, the number of unemployed decreased by 182,000 from previous year to 1.42 million.
The ILO jobless rate held steady at 4.3 percent in three months to September but down from 4.8 percent a year earlier. The rate came in line with expectations.
Average weekly earnings for employees increased by 2.2 percent both including and excluding bonuses, compared with a year earlier.
Bank of England Deputy Governor Jon Cunliffe said it was possible to wait for clear signs of pay growth picking up, before tightening policy early this month.
'In my view, the low level of domestic pressure on inflation now, the absence of second round effects from the depreciation of sterling, and inflation expectations around their historical averages, make it possible to wait before tightening policy until there is clear evidence that pay growth is responding to the level of unemployment in line with our forecast,' Cunliffe said.
Falling equities also hammered the currency, as weak commodity prices on concerns over Chinese growth kept investors nervous.
Market participants also looked ahead to a crucial vote on the U.S. tax reform bill due Thursday for direction.
The currency showed mixed trading in the Asian session. While it dropped against the yen and the franc, it rose against the greenback. Against the euro, the currency held steady.
The pound fell to near a 4-week low of 0.9014 versus the euro, after having advanced to 0.8955 at 5:00 pm ET. If the pound drops further, 0.92 is likely seen as its next support level.
Data from Eurostat showed that the euro area trade surplus increased in September from August as exports increased amid a fall in imports.
Exports grew 1.1 percent month-on-month in September, while imports decreased 1.2 percent.
The pound reversed from an early high of 1.3029 against the franc, touching near a 4-week low of 1.2956. Continuation of the pound's downtrend may see it challenging support around the 1.28 area.
The pound slipped to a 2-day low of 148.12 against the yen, following an advance to 149.36 at 5:00 pm ET. On the downside, 147.00 is likely seen as the next support for the pound-yen pair.
Figures from the Ministry of Economy, Trade and Industry showed that Japan's industrial production declined less than initially estimated in September.
Industrial production dropped a seasonally adjusted 1.0 percent monthly in September instead of a 1.1 percent decrease reported earlier. This was followed by a 2.0 percent rise in August.
The U.K. currency retreated to 1.3134 against the dollar, following an immediate rise to a 5-day peak of 1.3214 after the data. The next possible support for the pound-dollar pair is seen around the 1.30 area.
Looking ahead, U.S. consumer prices and retail sales for October, business inventories for September and New York Fed's empire manufacturing for November as well as Canada existing home sales for October are set for release in the New York session.
Copyright RTT News/dpa-AFX