Investing.com - The pound trimmed gains against the U.S. dollar on Tuesday, but remained supported as signs that tensions between Ukraine and Russia are easing continued to support demand for the risk-related sterling.
GBP/USD pulled away from 1.6717, the session high, to hit 1.6682 during U.S. morning trade, still up 0.10%.
Cable was likely to find support at 1.6584, the low of February 24 and resistance at 1.6768, the high of February 28.
The pound remained supported after Russian President Vladimir Putin said a military deployment in Ukraine is not needed now but the “possibility” still remains, and added that if Russia takes action it will be legitimate.
Market sentiment had strengthened earlier, after the Russian defense minister ordered troops engaged in military exercises close to Ukraine’s borders to return to their bases.
But investors still remained cautious, as Russian forces were still maintaining a military presence in Ukraine’s Crimea region. Meanwhile, the U.S. was likely to impose economic sanctions on Russia later in the week, following its military incursion into Crimea.
In the U.K., the Markit construction purchasing managers' index fell to 62.6 in February from a reading of 64.6 in January, the highest level since August 2007. Analysts had expected the index to fall to 63.0 last month.
The report said heavy rain and flooding in parts of the country had contributed to softer construction output growth in February, especially in house building.
“Bad weather took a bite out of progress in house building, but U.K. construction remains on a strong growth trajectory in February,” senior economist at Markit David Noble said.
Job creation in the sector hit a three-month high and firms remained highly positive about their expectations for business activity over the year ahead, survey complier Markit said.
Sterling was little changed against the euro, with EUR/GBP dipping 0.02% to 0.8239.