• GBP/USD saw minor losses around 1.2970 during Tuesday’s early Asian session.
• Uncertainty around the US presidential election and geopolitical risk may support the USD.
• The expectation that the BoE will cut interest rates this year is weighing on the British pound.

During Tuesday’s early Asian session, GBP/USD is trading with minor losses near 1.2970. The US Dollar Index (DXY) is currently flat around 104.30, after hitting a three-month high of 104.57 in the previous session. Investors may prefer to wait on the sidelines for key U.S. economic data this week.

Encouraging U.S. economic data last week suggests the U.S. economy remains resilient, which is pushing the dollar higher. Advanced third-quarter U.S. gross domestic product (GDP) data and October nonfarm payrolls (NFP) data this week will be closely watched as they could provide clues to the size and pace of interest rate cuts by the Federal Reserve (Fed). . According to CME’s FedWatch tool, U.S. interest rate futures have priced the probability of the Fed cutting interest rates by 25 basis points (bps) in November at 96.8%.

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

Growing bets that the Bank of England (BoE) will cut interest rates at all two remaining meetings this year could push the pound sterling (GBP) lower. However, BoE policymaker Catherine Mann’s hawkish comments may overshadow this negative development. The BoE’s Mann, a committed hawk, said last week: “Cutting interest rates would be premature if the structural persistence of the relationship between wages and price developments persists.”