SINGAPORE, June 1 Reuters The dollar drifted from a twomonth high on Thursday as investors trimmed bets the Federal Reserve will raise interest rates this month, though a vote of approval from the U.S. House to suspend the debt ceiling lent some support to the greenback.

A divided U.S. House of Representatives on Wednesday passed a bill to suspend the 31.4 trillion debt ceiling, and the focus now turns to how it will fare in the Democraticled Senate just days before the federal government is expected to run out of money to pay its bills.

The dollar showed little reaction to the news initially, though it gained ground over the course of the Asian trading day to reverse some losses from earlier in the session.

Against the greenback, the euro fell 0.07 to 1.0681, while sterling slipped 0.01 to 1.24395.

Our view is that … the U.S. government will avoid a default that could potentially derail the U.S. and also the global economy, said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

I think the dollar can gain a little bit more support on a successful vote today.

The U.S. dollar index rose 0.13 to 104.28, though had retreated from an over twomonth high hit in the previous session as traders pared back their expectations of another rate hike by the Federal Reserve this month.

Fed officials including the vice chairdesignate pointed towards a rate hike skip in June, giving time for the U.S. central bank to assess the impact of its tightening cycle…