Forex Today: Dollar selloff pauses, eyes on central bankers' appearance at IMF event

Here is what you need to know on Thursday, April 21:

Pressured by the sharp decline witnessed in the US Treasury bond yields, the greenback weakened against its major rivals on Wednesday. The dollar holds its ground early Thursday as investors wait for FOMC Chairman Jerome Powell and European Central Bank (ECB) Christine Lagarde to speak at the IMF Spring Meetings. The European economic docket will feature the final revision to March inflation figures and the preliminary Consumer Confidence data for April. In the second half of the day, the weekly Initial Jobless Claims and Philadelpiha Fed Manufacturing Survey from the US will be looked upon for fresh impetus.

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With the yields on the 10-year US Treasury Inflation-Protected Securities (TIPS) moving into positive territory on Wednesday, the 10-year US T-bond yield fell 3.5% and the US Dollar Index /DXY) lost 0.65%. Moreover, mixed comments from Fed officials didn't allow the dollar to gather strength.

Chicago Fed President Charles Evans noted that he was not expecting inflation to drop back to 2% next year but added that there was good reason to think that special factors driving inflation higher would ramp down. Commenting on the rate outlook, San Francisco Fed President Mary Daly noted that it would be "abrupt or surprising" to see the policy rate rising to 2.5% this year. 

EUR/USD gained more than 50 pips on Wednesday and was last seen moving sideways near mid-1.0800s. In addition to the broad-based dollar weakness, hawkish ECB commentary helped the shared currency find demand as well. ECB policymaker Martins Kazaks said on Wednesday that a rate hike could come as soon as July and policymaker Pierre Wunsch noted early Thursday that policy rates could turn positive this year. 

GBP/USD snapped a four-day losing streak on Wednesday. The pair stays relatively quiet near 1.3050 in the early European session as the dollar's market valuation remains the primary driver of its movements.

USD/JPY finally staged a downward correction on Wednesday after touching a multi-decade high of 129.24. The pair seems to have gone into a consolidation phase near 128.00 with the 10-year US T-bond yield recovering a small portion of its latest losses early Thursday.

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Following Tuesday's steep decline, gold registered modest gains on Wednesday. The upbeat market mood in the second half of the day made it difficult for the yellow metal to find demand despite falling US yields. XAU/USD is fluctuating in a narrow channel at around $1,950 on Thursday.

Bitcoin climbed above $42,000 on Wednesday but lost its bullish momentum. At the time of press, BTC/USD was trading flat on the day at $41,500. Ethereum closed in negative territory on Wednesday but managed to stay afloat above the key $3,000 handle.