Investing.com - The pound edged lower against the dollar on Monday as concerns over escalating tensions between Russia and the West weighed on market sentiment, underpinning safe haven demand.
GBP/USD touched lows of 1.7070 and was last at 1.7083.
Cable was likely to find support at around the 1.70 level and resistance at 1.7150.
Tensions between the West and Russia have mounted since the shooting down of a Malaysian airliner in eastern Ukraine late last week. The U.S. and other nations have accused Russia of complicity in the crash, which Moscow has denied.
Market sentiment deteriorated on Monday following reports that Ukrainian troops were moving in to the rebel held city of Donetsk, fuelling fears over an escalation in the region.
Concerns over Israel's ground offensive in Gaza also contributed to risk aversion in markets.
Sterling rose to almost six-year high of 1.7190 against the dollar last week amid expectations that the deepening economic recovery in the U.K. will prompt the Bank of England to raise interest rates before the end of the year.
However, the dollar received a boost after Federal Reserve Chair Janet Yellen indicated last week that interest rates may rise sooner if the economy continues to improve.
Elsewhere Monday, the pound was almost unchanged against the euro, with EUR/GBP at 0.7913, holding above Friday’s 22-month lows of 0.7888.
The single currency remained under pressure after recent comments by European Central Bank President Mario Draghi were seen as the latest sign that the bank is open to further monetary easing measures to stave off the risk of deflation in the euro area.