The pound advanced for a second week versus the dollar after the U.K. jobless rate unexpectedly fell below 7 percent, the threshold the Bank of England has set to start considering raising interest rates.
The dollar rose against the euro for a third week, the longest rally since July, as policy divergence with Europe outweighed conflicting commentary by U.S. officials and jobs data that failed to meet traders’ expectations.
The pound advanced for a fourth quarter versus the dollar, the longest winning streak in more than six years, before reports this week that analysts forecast will add to evidence the recovery is strengthening.
The euro fell to a three-week low against the pound on speculation the European Central Bank will ease monetary policy while above-target U.K. retail sales data added to bets the Bank of England will increase interest rates.
The dollar advanced against most of its 16 major peers amid bets the Federal Reserve will further reduce its bond-buying stimulus and link guidance on when it will raise interest rates to a range of economic indicators.