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NEW YORK  - The U.S. dollar dipped on Thursday after minutes from the Federal Reserve's May meeting pointed to additional 50 basis point interest rate hikes in June and July but left wiggle room for the central bank to slow the tightening cycle in the second half of the year.

The dollar index, which measures the currency against a basket of six major peers, was down 0.167% at 101.88 at 10:30 a.m. Eastern time (1430 GMT).

"The U.S. dollar is no longer king dollar that it was just a couple of weeks ago," said Boris Schlossberg, managing director of FX strategy at BK Asset Management.

Most participants at the Fed's May meeting judged 50 basis point hikes would likely be appropriate at the June and July policy meetings to combat inflation that they agreed had become a key threat to the economy's performance, the minutes, which were released on Wednesday, showed.

Many of the participants believed that getting rate hikes in the books quickly would leave the central bank well positioned later this year to assess the effects of policy firming.

That points to a more moderate tightening cycle going forward, Schlossberg said.

The dollar index reached a nearly two-decade peak above 105 in mid-month but signs that aggressive Fed action may already be slowing economic growth have prompted traders to scale back tightening bets, with Treasury yields also dropping from multi-year highs.

The implied yield on the eurodollar futures June 2023 contract -- essentially where markets see interest rates to be at that point -- is down some 80 basis points this month.

"The dollar at this point is range-bound," Schlossberg said.

NEW CLAIMS

Data released on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week, signaling continued tightness in the labor market.

The decline partially unwound some of the prior week's surge, which had pushed claims to their highest level since January.

In a separate report on Thursday, the Commerce Department confirmed the economy contracted in the first quarter under the weight of a record trade deficit and a slightly slower pace of inventory accumulation compared to the fourth quarter.

Elsewhere, the euro rose 0.33% to $1.07135, while the dollar edged down 0.08% against the Japanese yen to 126.160 yen.

The Australian dollar and New Zealand dollar , considered risk-sensitive currencies, were little changed versus the greenback.

Sterling briefly rose to a three-week high of $1.26165 ahead of an expected announcement from British Chancellor Rishi Sunak on a package of measures to help consumers cope with rising energy bills.

The pound was last down 0.12% at $1.2569.

In cryptocurrencies, bitcoin was last trading 1.2% lower at $29,156. Smaller rival ether was down over 5%.

GRAPHIC: Eurodollar futures (https://fingfx.thomsonreuters.com/gfx/mkt/akpezrnoavr/Pasted%20image%201653503783466.png)