The Dollar was on track for its largest weekly fall since the middle of January on Friday as investors increased bets the Federal Reserve will skip a rate hike this month, weakening the Dollar's appeal to non-US buyers.

Support for the greenback also waned due to the US Senate passing a bill to suspend the debt ceiling and avoid a default.

The Dollar index – measuring the currency against six rivals – has declined almost 0.8% this week, the largest weekly loss since mid-January. At the time of writing, it had edged down 0.1%, Reuters reports.

"With the debt ceiling in the rear-view mirror, the focus is very much back on central banks and economic data," said City Index markets strategist Fiona Cincotta.

"The problem is we've really had quite mixed messages, so, yes, more recently, we had two officials mentioning a skip in June, but that doesn't rule out a hike later in the summer, or even in July, so I think that expectation could still keep the Dollar supported," she added.

"Also, let's not forget inflation is still high."

On Thursday, Philadelphia Fed President Patrick Harker stated in reference to the meeting on 13th-14th June: "It's time to at least hit the stop button for one meeting and see how it goes."

Whereas on Wednesday, Fed Governor Philip Jefferson said: "Skipping a rate hike at a coming meeting would allow the committee to see more data before making decisions about the extent of additional policy firming."

Furthermore, the Dollar moved into positive territory against the Japanese Yen on Friday, following its longest run of daily losses since November 2022, with four days of falls. At the time of writing the greenback was up 0.1% at 138.89 Yen.

Elsewhere, the Euro was flat at $1.0769 on Friday, after hitting a one-week high of $1.07685 the day before, as President of the European Central Bank, Christine Lagarde, said additional policy tightening was needed.