- The U.S. dollar stabilized in early European trade Wednesday, remaining close to last session’s two-month high given the lack of progress in negotiations over raising the U.S. debt ceiling.

At 02:55 ET (06:55 GMT), the , which tracks the greenback against a basket of six other currencies, traded largely unchanged at 103.395, just below the 103.65 two-month peak seen late Tuesday.

While talks between both political parties continue over the lifting of the U.S. government's $31.4 trillion debt ceiling, any progress seems to be hard won and there are few signs of a deal being reached anytime soon.

There’s now just over a week before the early-June deadline that U.S. Treasury Secretary said is when it’s “highly likely” that her department will run out of sufficient cash to function as normal.

The of the Fed’s May meeting, due later in the day, will be studied carefully for any cues on when the central bank plans to pause its rate hike cycle. 

A number of Fed speakers over the last week have talked in a hawkish manner about the central bank’s monetary policy, suggesting are likely to stay higher for longer.

rose 0.1% to 1.0780 ahead of the release of the widely watched for May, which is expected to show a slight deterioration in confidence in Europe’s largest economy.

climbed 0.3% to 1.2452, bouncing off Tuesday’s one-month low, after U.K. headline fell by less than expected to 8.7% in April from March's 10.1%, while , which excludes volatile energy and food prices, rose to 6.8% - the highest rate since March 1992.  

The lifted interest rates by 25 basis points earlier this month, and these numbers are likely to reinforce expectations that the central bank will be forced to raise interest rates again in June.

edged higher to 138.64, having reached a six-month high overnight, the risk-sensitive fell 0.4% to 0.652, while slumped 1.7% to 0.6144 after the hiked interest rates as expected, but signaled a potential pause in its nearly two-year-long rate hike cycle.