GBP/USD edges higher but gains limited

The pound edged higher steady against the U.S. dollar on Tuesday, as earlier U.K. data continued to support demand for sterling, although concerns over the ongoing crisis in Ukraine were expected to limit gains.

GBP/USD hit 1.6744 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.6745, adding 0.10%.

Cable was likely to find support at 1.6662, the session low and resistance at 1.6788, the high of April 11.

The pound pulled away from session lows against the dollar, after data earlier showed that U.K. consumer price inflation rose 0.2% in March, in line with expectations, after a 0.5% increase the previous month.

On a yearly basis, U.K. CPI rose 1.6% last month, in line with market expectations, after a 1.7% gain in February.

In the U.S., official data showed that consumer price inflation rose 0.2% in March, exceeding expectations for a 0.1% gain, after a 0.1% uptick the previous month.

Core consumer price inflation, which excludes food and energy, rose 0.2% last month, more than the expected 0.1% increase, after a 0.1% gain in February.

Meanwhile, investors remained cautious as the U.S. and the European Union said that they are considering further sanctions against Moscow after pro-Russian separatists on Monday ignored an ultimatum to leave occupied government buildings in eastern Ukraine.

Market participants were eyeing a meeting scheduled on Thursday in Geneva between the U.S., the EU, Ukraine and Russia, with hopes it will bring a political resolution to escalating tensions in Eastern Europe.

Sterling was steady against the euro, with EUR/GBP down 0.07% to 0.8256.

The single currency was hit after data on Tuesday showed that the ZEW index for German economic sentiment fell to an eight-month low of 43.2 this month, from a reading of 46.6 in March. Analysts had expected the index to decline to 45.0 in April.