The pound rose against its main rivals on Wednesday (20 July), after data released by the Office for National Statistics earlier in the day showed that, in the quarter through May, the UK unemployment rate an 11-year low.

Having fallen to $1.3065, its lowest level since 12 July, sterling climbed against all its major 16 peers following the news the unemployment rate fell from 5% to 4.9% between March and May, the lowest reading on record since July 2005.

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By mid-afternoon, the pound was 0.34% against the dollar and 0.50% against the euro, exchanging hands at $1.3153 and €1.1932 respectively.

The pound was also boosted by a report from the Bank of England, in which it said it was yet to see any clear evidence of an economic downturn due to Britain's decision to vote in favour of leaving the European Union, although hiring and investments were being put on hold.

"Accelerating employment gains confirm the labour market was in robust shape as the EU referendum approached," said Chris Saint, senior analyst at Hargreaves Lansdown currency service.

"Whilst this pre-dates the 23 June Brexit vote, it tallies with a separate report from the Bank of England today suggesting companies have adopted a 'business as usual' approach, contrary to expectations that business investment and hiring could suffer."

Elsewhere, the euro fell 0.24% against the dollar, with the latter further extending gains against the yen as it rose 0.40% to ¥106.54.

"The economic data in the U.S. is supporting the argument that another rate hike could be a possibility by the end of this year and this is fueling the dollar rally," said Naeem Aslam, chief market analyst with Think Forex UK Ltd.

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