• GBP/USD depreciates as recent US jobs data reduced the odds of an aggressive Fed rate cut in September.
• The CME FedWatch Tool indicates that the likelihood of a 50 bps rate cut has slightly decreased to 29.0%.
• The upcoming UK labor market report could significantly influence market expectations regarding the BoE’s policy outlook in 2024.

GBP/USD extends its losing streak for the third successive day, trading around 1.3060 during the Asian session on Tuesday. The downside of the pair could be attributed to the improved US Dollar (USD), which received support as recent US labor data raised uncertainty over the likelihood of an aggressive interest rate cut by the Federal Reserve (Fed) at its September meeting.

According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has slightly decreased to 29.0%, down from 30.0% a week ago.

Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee remarked on Friday that Fed officials are starting to align with the broader market's sentiment that a policy rate adjustment by the US central bank is imminent, according to CNBC.

In the United Kingdom, investors are closely watching the employment data for the quarter ending in July, which is scheduled for release on Tuesday. This labor market report could significantly influence market expectations regarding the Bank of England's (BoE) interest rate decisions for the remainder of the year.