Sterling has climbed to a four-year high against the dollar after the UK's jobless rate, one of the triggers for an interest rate rise, was breached.
Yesterday the UK's unemployment rate fell below the 7% level previously highlighted as a key factor to determine the future path of rates.
The 7% threshold was identified by Bank of England governor Mark Carney in August as the point where policymakers will begin to consider a rise in Bank Rate.
Carney has since qualified his forward guidance on interest rates to say they could remain low for longer.
However, the drop in unemployment yesterday has nonetheless boosted the pound, which reached $1.685 during overnight trading in Asia, the highest level since November 2009.
Investors also reacted to comments from Federal Reserve Chair Janet Yellen yesterday, who signalled low interest rates in the US could continue for longer.
In a speech, she emphasized her focus on low inflation and economic slack, which could prevent the Fed from raising rates any time soon.
