GBP/USD steadies around 1.3500 amid rising odds of Fed rate cuts

• GBP/USD may further gain ground as US inflation data reinforced expectations for a Fed rate cut in September.
• The US Consumer Price Index rose 2.7% YoY in July, against the expected 2.8% increase.
• The recent UK jobs data may enable BoE officials to uphold their "gradual and careful" approach to monetary expansion.

GBP/USD remains steady after registering 0.5% gains in the previous session, trading around 1.3500 during the Asian hours on Wednesday. The pair further appreciates as the US Dollar (USD) struggles, driven by the latest United States (US) inflation data, which strengthened expectations for a US Federal Reserve rate cut in September.

The US Consumer Price Index (CPI) climbed 2.7% year-over-year in July, matching the 2.7% increase seen in the prior month, and came in below the expected 2.8% increase. Meanwhile, the annual core CPI rose by 3.1% in July, compared to the 2.9% rise seen in June, above the market consensus of 3%.

Markets are now pricing in approximately 94% odds of a Fed rate cut at the September meeting, up from 86% a day ago, according to the CME FedWatch tool. Last week, Fed Governor Michelle Bowman stated that three interest rate cuts are likely to be appropriate this year.

The GBP/USD pair strengthened as the Pound Sterling (GBP) gained ground, as Tuesday's upbeat United Kingdom (UK) labor market data could allow Bank of England (BoE) officials to maintain their "gradual and careful" monetary expansion stance.

UK Employment Change reported a fresh 239K jobs created in the second quarter, surpassing the 134K workers hired in the three months ending May. The ILO Unemployment Rate remained consistent at 4.7%, as expected. Claimant Count Change for July declined by 6.2K, while it was expected to increase to 20.8K. Traders shift their focus to Thursday's UK Preliminary Q2 Gross Domestic Product (GDP) and factory data for June.