GBP/USD trades with positive bias below 1.3400, remains close to multi-week low ahead of UK CPI

• GBP/USD gains some positive traction as the USD enters a bullish consolidation phase.
• Reduced Fed rate cut bets and a weaker risk tone act as a tailwind for the Greenback.
• Traders now look forward to the UK CPI report and the US PPI print for a fresh impetus.

The GBP/USD pair ticks higher during the Asian session on Wednesday, though it lacks follow-through buying and remains below the 1.3400 round-figure mark. Moreover, spot prices remain close to a three-and-a-half week low touched on Tuesday and seem vulnerable to prolonging the recent downward trajectory witnessed over the past two weeks or so.

The US Dollar (USD) is seen consolidating its recent strong gains to the highest level since June 23 and is seen as a key factor lending some support to the GBP/USD pair. However, diminishing odds for a near-term reduction in borrowing costs by the Federal Reserve (Fed), amid concerns that US President Donald Trump's trade tariffs would boost inflation, should act as a tailwind for the buck.

The expectations were reaffirmed by the latest US consumer inflation figures released on Tuesday. Adding to this, comments from influential FOMC members suggested that the US central bank will keep interest rates elevated for an extended period. Apart from this, a generally weaker tone around the equity markets could further benefit the safe-haven buck and contribute to capping the GBP/USD pair.

The British Pound (GBP), on the other hand, continues with its struggle to attract any meaningful buyers amid the growing acceptance that the Bank of England (BoE) could reduce interest rates in August. Traders, however, seem reluctant to place fresh bearish bets around the GBP/USD pair and opt to wait for the release of UK consumer inflation figures and the US Producer Price Index (PPI) later today.