European session review: USD slips as U.S. Treasury yields soften as fears of sooner-than-expected interest rate hike by Fed ebb

USD weakened slightly against most of its major rivals in the European session on Thursday as fears that the Federal Reserve would increase interest rates sooner than expected to curtail accelerated inflation resulting from the U.S. recovery eased after repeated assurances from the Fed's policymakers. 

Benchmark 10-year note yields declined to 1.613% early Thursday, nearing their four-week lows of 1.61%.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged down 0.05% to 91.65.

The Fed's Chair Jerome Powell told the Economic Club of Washington on Wednesday the U.S. was entering a period of faster growth and job creation but warned that coronavirus resurgence could derail the recovery. He also added that the Fed is likely to first reduce its monthly bond purchases after substantial progress on its goals on employment and inflation has been reached, then hold its balance sheet constant for a while, and then finally start to gradually increase interest rates.

Market participants are now awaiting two important data releases - the March retail sales and weekly jobless claims - that are due at 12:30 GMT.