Key facts
- Dollar index fell 0.2% to 99.245, retreating from a two-month high of 99.56.
- Optimism for a ceasefire in Lebanon increased, influencing currency markets.
- The Japanese yen traded at 159.915 per dollar, near the critical 160 level.
- US services businesses' prices paid component jumped to its highest level in nearly four years.
- The European Central Bank is expected to raise its deposit rate to 2.25% on June 11.
- Bank of Japan Governor Kazuo Ueda signaled a June rate hike.
The US dollar index slipped from a two-month high on Thursday as optimism grew regarding a ceasefire in Lebanon, while the Japanese yen hovered near the critical 160 per dollar level, prompting market vigilance for potential intervention. Lebanese President Joseph Aoun indicated a ceasefire could be in force within 24 hours, though Hezbollah rejected the plan. Iran views a ceasefire as a step towards broader peace talks. The dollar index fell 0.205% to 99.245, retreating from a previous high of 99.56. The yen traded at 159.915 per dollar, close to the 160 mark which triggered verbal warnings from Japanese authorities. Bank of Japan Governor Kazuo Ueda cemented expectations for a June rate hike, emphasizing a focus on fighting inflation amid rising energy price risks. Strong US services inflation data, showing the prices-paid component reaching its highest in nearly four years, reinforced views that the Federal Reserve will hold interest rates steady well into next year. The euro rose 0.33% to $1.1636 and the British pound climbed 0.25% to $1.345. The risk-sensitive Australian dollar fell 0.2% to $0.7142.