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The GBP/USD pair receives some purchasing interest during Tuesday's Asian session, reversing a portion of the previous day's sharp retracement decline from the 1.2600 level, or the one-month high. Spot prices are currently trading just above the psychological mark of 1.2500 as market participants await the latest UK employment report and US consumer inflation data for a fresh impetus.

In the meantime, expectations that the Federal Reserve (Fed) will likely forego a rate hike this month continue to weigh on the US Dollar (USD) and support the GBP/USD pair. A number of FOMC members recently reaffirmed market expectations for an imminent pause in the US central bank's year-long cycle of policy tightening. In contrast, it is anticipated that the Bank of England (BoE) will be much more aggressive in its policy tightening to contain persistently high inflation. In addition, market participants are increasingly optimistic that British interest rates will crest at 5.5% later this year.

However, the downside for the USD appears to be cushioned in the aftermath of rising wagers for another 25 bps hike at the FOMC's July meeting. Surprise rate increases by other major central banks last week, including the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC), indicated that the fight against inflation is not yet over and supported the likelihood of further rate hikes by the Fed. Consequently, the market will continue to concentrate on the crucial US CPI report, which is due later in the North American session. The data will influence the USD prior to the FOMC's June policy decision, which will be announced on Wednesday.

Investors will take additional cues from the UK employment report on Tuesday, which is anticipated to show a 9.6K decrease in the number of individuals claiming unemployment-related benefits in May. In addition, the ILO Unemployment Rate is anticipated to increase to 4% in the three months leading up to April, while Average Hourly Earnings likely accelerated during the reported period, indicating expanding indications of persistent underlying price pressures. This may be sufficient to provide the British Pound with a fresh boost and assist the GBP/USD pair in capitalizing on its modest intraday gains advance of the key data/event risks.

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