Pound Sterling to US Dollar (GBP/USD) Exchange Rate softer today as data weighs

The Pound softened against the US Dollar on Wednesday and edged away from earlier four-year highs after data showed that the UK unemployment rate ticked higher in the final quarter of 2013.

Prior to the release of data by the Office for National Statistics the currency was trading higher against the US Dollar. Once the data showed that the UK unemployment rate increased unexpectedly to 7.2% the Pound slipped.

Heavier declines were muted however due to a separate report showing that the number of UK citizens claiming unemployment benefit declined more than expected in January. The ONS said that the claimant count fell by a seasonally adjusted 27,600 to 1.22 million, better than expectations for a decline of 20,000 people.

The US Dollar was also restrained by the publication of a report which showed that the pace of new home construction in the country fell more than forecast in January. New builds fell by 16% to 880,000, a sharp fall from the previous month’s figure of 1.5 million. The fall was the biggest recorded since February 2011. The data was also the latest in a line of disappointing US data released in recent months and added to worries that the world’s largest economy is slowing down.

Some economists however believe that the recent run of poor data is just the result of the extreme winter weather that has affected large swathes of the American continent.

The ‘Greenback’ is likely to experience further volatility later today as the Federal Reserve will be publishing the minutes of its last policy meeting tonight. Investors will be watching out for signs that the Central Bank could be planning to reduce the pace of the tapering to its monetary easing programme.