Pound Sterling to US Dollar (GBP/USD) Exchange Rate at three week high on UK jobs data

The US Dollar was at its lowest level in three weeks against the Pound and could fall to a one-year low after the UK posted better than forecast unemployment data.

The ‘Greenback’ also softened against the Euro after data reports showed that on a weekly basis chain store retail sales fell to -1.9% from the previous week’s decline of -1%. On a yearly basis sales declined from 1.3% to 0.9%.

A separate report showed that the number of mortgage applications in the US increased again during the week ending January 17th according to information released this afternoon by the Mortgage Bankers Association (MBA). The MBA’s Market Composite Index, a measure of that volume, increased 4.7 percent on a seasonally adjusted basis from one week earlier and was up 7% on a non-adjusted basis.

Earlier in the session the Pound soared against its peers following the publication of surprisingly positive unemployment data. According to the Office for National Statistics the UK’s jobless rate fell from 7.4% to 7.1% in November, beating economist forecasts for a figure of 7.3%.

“It was now likely that the unemployment rate would reach the 7% threshold materially earlier than previously expected,” the minutes said, but officials “saw no immediate need to raise Bank Rate,” the bank’s benchmark interest rate, “even if the 7% unemployment threshold were to be reached in the near future.”

The ‘Greenback’ could recover some ground against the Pound on Thursday if the latest US continuing jobless claims and manufacturing PMI data comes in strongly.