GBP/USD holds steady below 1.2500; softer USD acts as a tailwind

• GBP/USD consolidates near the top end of its weekly trading range. 
• Traders seem reluctant ahead of the key BoE meeting on Thursday.
• The USD hangs near the weekly low and lends support to the major.

The GBP/USD pair struggles to capitalize on its strong gains registered over the past two days and consolidates near a one-week top, below the 1.2500 psychological mark during the Asian session on Wednesday. The downside, however, remains cushioned amid some follow-through US Dollar (USD) selling. 

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, hangs near the weekly low amid the prospects for further policy easing by the Federal Reserve (Fed). The bets were reaffirmed by the Job Openings and Labor Turnover Survey (JOLTS) released on Tuesday, which pointed to a slowdown in the US labor market and should allow the Fed to lower borrowing costs further despite stick inflation. 

Meanwhile, the global risk sentiment remains supported by the optimism led by US President Donald Trump's decision to delay tariffs on Canadian and Mexican imports, which helped ease concerns about a trade war and its impact on the global economy. This is evident from a generally positive tone around the equity markets, which is seen as another factor undermining the safe-haven buck and acting as a tailwind for the GBP/USD pair. 

Investors, however, remain concerned about the potential fallout from trade tensions between the US and China - the world's top two economies. This, along with the Fed's hawkish outlook, helps limit the downside for the USD and caps the upside for the GBP/USD pair. Traders also seem reluctant and might opt to move to the sidelines ahead of the key central bank event risk - the Bank of England (BoE) policy meeting on Thursday.