Pound Falls As U.K. Jobless Rate Ticks Up

(RTTNews) - The pound dropped against its major counterparts in the European session on Tuesday, as the nation's jobless rate came in higher than expected in the three months to March, reducing concerns over more interest rate hikes from the Bank of England.

Data from the Office for National Statistics showed that the unemployment rate rose to 3.9 percent in the three months to March from 3.8 percent in the preceding period. The rate was forecast to remain unchanged at 3.8 percent.

Average earnings, excluding bonuses, increased 6.7 percent annually, lower than economists' forecast of 6.8 percent.

Average earnings, including bonuses, came in at 5.8 percent and in line with estimates.

Claimant count rose to 46,700 in April from a revised 26,500 in March.

The pound weakened to 0.8718 against the euro and 1.2465 against the greenback, from its early highs of 0.8675 and 1.2532, respectively. The pound is seen challenging support around 0.90 against the euro and 1.21 against the greenback.

The pound fell to 169.39 against the yen and 1.1164 against the franc, reversing from an early high of 170.49 and a 5-day high of 1.1223, respectively. The pound is poised to find support around 164.00 against the yen and 1.10 against the franc.

Looking ahead, Eurozone first quarter GDP data and German ZEW economic sentiment index for May are slated for release shortly.

In the New York session, Canada CPI for April, U.S. retail sales data for April, industrial production for April and U.S. NAHB housing market index for May are scheduled for release.

At 8:15 am ET, Federal Reserve Bank of Cleveland President Loretta Mester will deliver a speech in person before the Global Interdependence Center "Central Banking Series: Dublin" event, in DUBLIN, Ireland.