Dollar slips from two-month high amid Iran talks, yen trades near 160

By Jiaxing Li

HONG KONG, June 4 (Reuters) - The dollar slipped from a two-month precocious connected Thursday arsenic optimism roseate astir a ceasefire successful Lebanon, portion markets were alert to the anticipation ‌of involution arsenic the Japanese yen hovered adjacent the cardinal 160 level.

Lebanese President Joseph Aoun ‌said connected Thursday that the ceasefire would travel into unit wrong 24 hours of each acrophobic parties approving it.

Iran has said a ceasefire ​in Lebanon is simply a cardinal signifier successful advancing broader bid talks. Hezbollah, however, has not yet commented connected the agreement.

The euro roseate 0.3% to $1.164. A Reuters canvass showed that the European Central Bank is acceptable to rise its deposit complaint to 2.25% connected June 11 to curb inflation. The British lb besides climbed 0.3% to $1.346.

The dollar ‌index, which measures the greenback against large ⁠peers, fell 0.2% to 99.23, down from a two-month precocious of 99.56 reached successful the erstwhile session.

Iranian attacks connected Kuwait damaged its airdrome and injured dozens connected Wednesday, ⁠while the U.S. subject carried retired strikes adjacent the Strait of Hormuz, complicating prospects for a diplomatic extremity to the warfare and lifting the safe-haven dollar.

"It's hard to reason against dollar spot astatine this juncture," said Francesco Pesole, currency ​strategist astatine ​ING.

"Data continues to overgarment a representation of resilience for ​the U.S. economy," helium added, adding that doubts ‌about the bid talks person boosted the dollar.

The risk-sensitive Australian dollar roseate 0.2% to $0.714.

On the information front, a survey connected Wednesday showed a measurement of prices paid by U.S. services businesses jumped to the highest level successful astir 4 years past month. This cements economists' views that the Federal Reserve would clasp involvement rates unchanged good into adjacent year.

The Japanese yen fetched 159.81 per dollar, rising from lows connected Wednesday that pushed it ‌past the captious 160-per-dollar people for the archetypal clip since ​April 30, triggering verbal warnings from authorities.

The 160 level is wide ​seen successful markets arsenic a enactment successful ​the soil for imaginable authoritative intervention.

Bank of Japan Governor Kazuo Ueda cemented a June ‌rate hike successful a communicative pivot toward inflation-fighting, ​as the Iran war-driven vigor ​shock sharpens terms risks and opens the doorway to much predominant increases successful borrowing costs.

"The hawkish code has strengthened further, including a wide look of interest astir behind-the-curve risk," wrote Naohiko Baba, caput ​of Japan probe and main Japan ‌economist astatine Barclays. "We instrumentality to our June complaint hike call."