Sterling extended gains above $1.24, moving closer towards an over 10-month high of $1.2546 touched on April 14, after data showed the UK labor market remained tight in the three months to February.
The jobless rate edged up to 3.8% and total pay growth was unchanged at 5.9%, above forecasts of 5.1% and adding to inflationary pressures that are concerning the Bank of England.
Investors now await key CPI data due Wednesday ahead of a highly anticipated policy meeting in May that will probably see UK policymakers delivering a 25 bps rate hike to combat inflation.
Meanwhile, last week's report showed Britain's GDP stagnated in February due to strikes by public workers.
Still, January's growth was revised higher, suggesting the economy might avoid a recession in early 2023.
In the US, data pointing to a resilience in core retail sales and solid bank earnings, alongside hawkish comments by Fed policymakers raised the chances for a 25 bps increase from the US central lender next month.