SINGAPORE, May 26 Reuters The dollar eased on Friday but remained near a twomonth high against its major peers, buoyed by expectations that U.S. interest rates could remain higher for longer.

Debt ceiling negotiations between U.S. President Joe Biden and top congressional Republican Kevin McCarthy also continued to cast a shadow over the market mood, though news that the two are closing in on a deal aided investor sentiment and caused the greenback to pause its recent rally.

The dollar edged away from a sixmonth high against the yen in Asia trade and last stood at 139.77, having reached 140.23 yen in the previous session, its highest since November.

Against a basket of currencies, the U.S. dollar slipped 0.13 to 104.09, just off Thursday39;s twomonth high of 104.31.

The index was, nonetheless ,on track for a third straight weekly gain of more than 0.8, as traders ramped up their expectations of how much further rates could rise in the United States.

Recent moves in currencies have been mainly driven by a sharp repricing of FOMC policy, said Carol Kong, a currency strategist at Commonwealth Bank of Australia CBA.

Money markets are now pricing in a 40 chance that the Federal Reserve will deliver another 25basispoint rate hike at its policy meeting next month, while expectations that the Fed will begin cutting rates later this year have been scaled back.

Data released on Thursday showed that the number of Americans filing new claims for unemployment benefits…