Investing.com - The pound dropped to nearly five-week lows against the U.S. dollar on Tuesday, as markets were jittery following reports armed gunmen stormed a Ukrainian military base in Simferopol, although mixed U.S. economic reports did little to support the greenback.
GBP/USD hit 1.6552 during U.S. morning trade, the pair's lowest since February 12; the pair subsequently consolidated at 1.6567, retreating 0.42%.
Cable was likely to find support at 1.6426, the low of February 12 and resistance at 1.6666, Monday's high.
The risk-related pound weakened after CNN reported that Vladislav Seleznyov, Ukraine's defense ministry spokesman, said at least one Ukrainian officer had been injured in an assault on a base by "armed people in masks" near the Crimean capital of Simferopol.
Earlier Tuesday, Russian President Vladimir Putin said that Russia isn't seeking "a partition of Ukraine", signaling that Russia's moves in Ukraine would be limited.
The comments came during a speech to a joint session of parliament in Moscow, a day after the president recognized the results of Sunday's referendum in Crimea, which saw a majority of voters chose to split from Ukraine.
The European Union and the U.S. have declared the vote illegal and imposed sanctions.
In the U.S., data showed that the annual rate of inflation slowed to 1.1% in February from 1.6% in January. Analysts had expected the annual inflation rate to decline to 1.2%. Month-on-month, U.S. consumer prices rose 0.1% in February, in line with forecasts.
Separately, the Commerce Department reported that the number of building permits issued in the U.S. rose to a four-month high in February, rebounding after a sharp drop in January.
The number of building permits issued last month jumped 7.7% to 1.018 million units following a 16.8% fall in in January, as a result of severe winter weather.
However, U.S. housing starts fell 0.2% last month to hit a seasonally adjusted 907,000 units, disappointing expectations for an increase of 3.4% to 910,000 units.
Sterling was lower against the euro, with EUR/GBP rising 0.32% to 0.8395.
Also Tuesday, a report showed that German economic sentiment deteriorated in March, as concerns over the crisis in Ukraine weighed.
The ZEW Centre for Economic Research reported that its index of German economic sentiment fell to 46.6 this month from February’s reading of 55.7. Analysts had expected the index to decline to 53.0.