GBP/USD climbs back closer to 1.3100, upside seems limited ahead of UK data/US CPI

• GBP/USD attracts some buyers on Wednesday amid a modest USD decline.
• The fundamental backdrop warrants before placing aggressive bullish bets.
• Traders might also prefer to wait for the release of the crucial US CPI report.

The GBP/USD pair regains positive traction during the Asian session on Wednesday and climbs to a fresh daily peak, closer to the 1.3100 round-figure mark in the last hour. Spot prices, however, remain below the overnight swing high, warranting some caution before positioning for any meaningful recovery from a three-week low, around the 1.3050-1.3045 region touched the previous day. 

The US Dollar (USD) stalls its positive trend witnessed over the past three days and retreats from the vicinity of the monthly top amid the prospects for an imminent start of the Federal Reserve's (Fed) policy-easing cycle in September. This, in turn, is seen as a key factor lending some support to the GBP/USD pair. That said, a generally weaker tone around the equity markets could help limit losses for the Greenback and cap the currency pair amid bets that the Bank of England (BoE) will announce more interest rate cuts this year.

The UK Office for National Statistics (ONS) reported on Tuesday that the number of people claiming unemployment-related benefits increased by 23.7K in August as compared to the 102.3K previous and well below the 95.5K expected. Adding to this, the ILO Unemployment Rate expectedly ticked lower from 4.2% to 4.1% in the three months to July. That said, a slowdown in the UK wage growth was seen as positive news for inflation and might provide the UK central bank with increased confidence regarding cutting interest rates further. 

Traders might also refrain from placing aggressive bullish bets around the British Pound (GBP) ahead of the UK data dump, including the monthly GDP print, and the latest US consumer inflation figures. The crucial US Consumer Price Index (CPI) report will play a key role in influencing market expectations about the Fed's rate-cut path. This, in turn, will drive the USD demand in the near term and provide a fresh directional impetus to the GBP/USD pair.