Sterling jumped to a two-week high near $1.66, up 0.8 percent on the day, and above $1.65 before the report was released as investors brought forward expectations of the first rate hike. Against the dollar, the euro was down 0.40 percent around $1.36; against the yen, it was almost 0.7 percent at about 139.09 yen.
The euro was also hurt by weak economic data and comments from ECB Executive Board member Benoit Coeure, who said the bank was "very seriously" considering a negative deposit rate. The rate, at which banks park surplus funds with the central bank, is now zero percent.
The euro's losses lifted the dollar index just above 0.1 percent to near 80.74, pushing it above a two-week low of 80.448. The dollar was also helped by comments on Tuesday from new Federal Reserve Chair Janet Yellen.
Earlier, Australia and New Zealand dollars hit one-month highs as improved Chinese trade data eased concerns about growth in the world's second-biggest economy and bolstered demand for riskier assets. China is Australia's biggest export market.