Dollar is falling amid the possibility that the Fed will stop raising interest rates

The dollar fell from its highest level in two months on Thursday, as investors scaled back their expectations that the Federal Reserve will raise interest rates this month, but the House of Representatives vote to approve the suspension of the debt ceiling provided some support for the US currency.

A divided US House of Representatives on Wednesday passed a bill to suspend the $31.4 trillion debt ceiling, and focus has now turned to how the Democratic-led Senate will handle the bill days before the federal government is expected to run out of funding to meet its obligations.

The dollar did not show much change immediately after this development occurred, but it made gains in Asian trading to compensate for some of the losses incurred earlier in the session.

The euro fell against the dollar 0.07 percent to 1.0681 dollars, while the pound sterling fell 0.01 percent to 1.24395 dollars.

The dollar index rose 0.13 percent to 104.28, but it retreated from its highest level in more than two months, which it reached in the previous session, as dealers cut their expectations of the US Central Bank announcing another hike in interest rates this month.

The Japanese yen fell nearly 0.2 percent to 139.59 against the dollar.

The Chinese yuan recorded 7.1184 against the dollar in the latest offshore trading, away from the lowest level in six months recorded in the previous session, supported by a survey of private business activity on Thursday that showed that Chinese factory activities unexpectedly turned to growth in May after a decline in April.

The Australian dollar received support from the Chinese factory activity report on Thursday, and rose in the latest trading by 0.11 percent, recording $ 0.6511. The New Zealand dollar fell 0.18 percent to $0.6010.