GBP/USD holds steady near 1.3750, US ADP Employment data in focus

• GBP/USD flat lines to around 1.3745 in Wednesday’s Asian session. 

• Fed's Powell said an interest-rate cut this month cannot be ruled out. 

• Trump's massive tax and spending bill will go back to the House for final approval. 

The GBP/USD pair trades on a flat note near 1.3745 during the Asian trading hours on Wednesday. However, the dovish remarks from the US Federal Reserve (Fed) Chair Jerome Powell and rising fiscal worries might weigh on the Greenback in the near term. Investors await the US ADP Employment Change report for June for fresh impetus, which is due later on Wednesday.

The Fed’s Powell said on Tuesday that the US central bank will take a patient approach to further interest rate reductions but didn't rule out a rate cut at the July meeting, but the decision will depend on incoming data. According to the CME FedWatch tool, short-term interest-rate futures are now pricing in nearly a one-in-four odds of a rate cut by the July meeting after the dovish comments, up from less than one-in-five earlier. 

Investors are concerned about US President Donald Trump's massive tax-and-spending bill, which could add 3.3 trillion in additional national debt. The bill will return to the House for final approval. Fiscal worries might dampen optimism and contribute to the USD’s downside.

On the GBP’s front, the Bank of England (BoE) Governor Andrew Bailey said last week that there were now signs that the UK labor market was softening, and he highlighted that interest rates are likely to continue falling. The UK central bank is anticipated to cut interest rates three times by the end of 2025, bringing them to 3.5% to combat sluggish economic growth and a weaker labor market. Rate reductions are expected in August, September, and November 2025, with potential quarterly reductions.