The dollar retreated from its highest level in two months on Thursday as investors scaled back expectations that the Federal Reserve (the U.S. central bank) would raise interest rates this month. However, the House of Representatives' vote to approve a suspension of the debt ceiling provided some support for the U.S. currency.
On Wednesday, the divided U.S. House passed a bill to suspend the debt ceiling of $31.4 trillion, shifting the focus now to how the Democrat-led Senate will handle the bill just days ahead of the expected deadline for the federal government to meet its obligations. The dollar showed little change initially following this development but gained in Asian trading, recovering some of the losses incurred earlier in the session.
The euro fell 0.07 percent against the dollar to $1.0681, while the pound dropped 0.01 percent to $1.24395. The dollar index rose 0.13 percent to 104.28 but retreated from its highest level in over two months. The Japanese yen fell nearly 0.2 percent to 139.59 against the dollar. The Chinese yuan traded at 7.1184 against the dollar in recent offshore transactions, distancing itself from a six-month low, supported by a survey of private sector activity on Thursday that unexpectedly showed that Chinese manufacturing activities grew in May after a decline in April.
