Investing.com

Investing.com - The euro fell to one-year lows against the broadly stronger pound on Wednesday after data showed that the U.K. unemployment rate fell to 7.1% in November, raising questions over the Bank of England’s forward guidance on rates.



EUR/GBP fell to 0.8180, the lowest since January 2012 and was last down 0.47% to 0.8191.



The pair was likely to find support at 0.8050 and resistance at 0.8235, the session high.



Sterling strengthened after the Office for National Statistics said that the rate of unemployment in the U.K. fell to 7.1% in the three months to November, to stand just above the 7% threshold at which the Bank of England has said it would consider hiking interest rates.



It was the largest drop in unemployment since 1997 the ONS said. Analysts had expected the jobless rate to fall to 7.3% from 7.4% in the three months to October.



The ONS said the number of people claiming jobless benefits fell by 24,000 in December, compared to expectations for a decline of 35,000.



Wednesday’s minutes of the Bank of England''s January meeting said the unemployment rate will hit the 7% threshold "materially earlier" than forecast, but reiterated that policymakers saw no immediate need to raise rates even if the threshold is reached in the near future.



The minutes also showed that policymakers voted unanimously to keep monetary policy on hold this month.



The euro remained under pressure amid concerns that the subdued inflation outlook for the euro zone could prompt the European Central Bank to ease monetary policy to help shore up the recovery in the region.



The euro was slightly lower against the dollar, with EUR/USD slipping 0.13% to 1.3542.



Elsewhere, the pound rose to three-week highs against the dollar following the release of the U.K. data. GBP/USD hit 1.6550, the highest since January 2 and was last up 0.37% to 1.6536.





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