GBP/USD holds below 1.3000 as traders brace for US GDP, employment data

• GBP/USD posts modest losses around 1.2970 in Tuesday’s early Asian session. 
• The uncertainty surrounding the US presidential election and geopolitical risks might support the USD. 
• The expectation that the BoE would cut rates this year weighs on the GBP. 

The GBP/USD pair trades with mild losses near 1.2970 on Tuesday during the early Asian session. The US Dollar Index (DXY) currently trades flat around 104.30 after reaching a three-month high of 104.57 in the previous session. Traders might prefer to wait on the sidelines ahead of the key US economic data this week. 

The encouraging US economic data last week suggests that the US economy remains resilient, lifting the Greenback. The advanced US Q3 Gross Domestic Product (GDP) and the October Nonfarm Payrolls (NFP) this week will be closely watched as they might offer some hints about the size and speed of the US Federal Reserve’s (Fed) rate cuts. US rate futures have priced in 96.8% odds that the Fed will cut rates by 25 basis points (bps) in November, according to the CME FedWatch tool. 

Meanwhile, the uncertainty over the US presidential election and the ongoing geopolitical tensions in the Middle East are likely to support the US Dollar (USD), the safe-haven currency. 

The rising bets that the Bank of England (BoE) would cut the interest rates in all two remaining meetings this year might drag the Pound Sterling (GBP) lower. However, the hawkish remarks from the BoE policymaker Catherine Mann might cap its downside. BoE’s Mann, an outspoken hawk, said last week "It would be premature to cut rates if you have structural persistence in the relationship between wages and price formation.”