GBP/USD steadies near 1.2150, stays on track to post weekly gains

• GBP/USD continues to trade in positive territory at around 1.2150.
• US Dollar stays on the back foot after UoM Consumer Sentiment Survey.
• The pair remains on track to post weekly gains.

GBP/USD declined toward 1.2100 during the European trading hours but regained its traction amid renewed US Dollar (USD) weakness. The pair seems to have stabilized at around 1.2150 in the American session and remains on track to end the week in positive territory.

Plunging US yields weigh on USD

Despite the negative shift witnessed in risk sentiment, the USD is having a difficult time finding demand ahead of the weekend. The benchmark 10-year US Treasury bond yield is down nearly 5% on the day at around 3.4%, forcing the US Dollar Index (DXY) to stay in the red near 104.00.

The data published by the University of Michigan (UoM) revealed on Friday that the Consumer Confidence Index declined to 63.4 in early March from 67 in February. More importantly, "year-ahead inflation expectations receded from 4.1% in February to 3.8%, the lowest reading since April 2021," UoM Surveys of Consumers Director, Joanne Hsu, said.

Ahead of next week's critical Federal Reserve policy meeting, this report seems to be causing investors to reassess their positions. According to the CME Group FedWatch Tool, the probability of a 25 basis points Fed rate hike next week currently stands at 68%, down from nearly 80% earlier in the day.

Technical levels to watch for