I am using XCode 8.1 without problem (both device and simulator). One of my test devices is on 10.3 beta 3, so I need to run XCode 8.3 beta. It fails with the following error:
/Users/phil/dev/kokomot/Kokomot/Kokomot.xcdatamodeld/Kokomot.xcdatamodel: Cannot find cdtool at '/var/folders/9x/wrdwltwx6jg6f7tzfrjq6d5c0000gn/T/AppTranslocation/4337E592-3A26-47A2-BFA2-9A5B067EC6CB/d/Xcode-8.3-beta.app/Contents/Developer/Platforms/iPhoneSimulator.platform/Developer/Library/Xcode/Agents/cdtool': Cannot find a simulator runtime for platform >.
Note that the "cdtool" error is misleading; the cdtool is there, but presumably won't run because of the simulator runtime error.
UPDATE: Got this working in XCode 8.1 by symlinking to the 10.3 folder in the XCode beta: https://gist.github.com/steipete/d9b44d8e9f341e81414e86d7ff8fb62d