The dollar was pinned beneath recent peaks on Thursday with traders taking remarks from Federal Reserve Chair Jerome Powell as reassuring on the likelihood of interest rate cuts this year while waiting for the latest U.S. labour market readout. An unexpected slowdown in U.S. services growth also supported cut expectations and weighed on the dollar, though for the year so far it remains the best-performing G10 currency as those expectations are far more modest than three months ago. The yen , which has been frozen lately by the risk of official intervention, hardly enjoyed much relief either, and at 151.56 was more or less where it has been for three weeks. The euro , up 0.6% overnight, was back to the middle of a range it has kept for a year at $1.0837. European inflation came in softer-than-expected on Wednesday, reinforcing expectations for a European rate cut in June. Futures pricing was broadly steady and implied markets see about a 60% probability of a Fed cut in June. The Australian dollar broke above its 200-day moving average as the U.S. dollar dipped overnight and was steady at $0.6568 on Thursday. The U.S. dollar index, up 2.8% this year as market expectations for more than 160 basis points of U.S. rate cuts have been sliced in half, was last at 104.22. It made a four-and-a-half-month high of 105.10 on Tuesday. U.S. Treasury yields, which shot up earlier in the week, retreated slightly overnight. US/ PMI readings are due in Europe later on Thursday, as is the readout from last month's European Central Bank meeting. The major focus for the rest of the week will be on U.S. labour data due on Friday.