Dollar not far from 2-week high

US-dollars being counted at the Korea Exchange bank.
Chung Sung-Jun | Getty Images

The dollar stepped back in Asian trade on Thursday but held close to a two-week peak against a basket of major currencies as investors focused on the pace of the U.S. Federal Reserve's coming interest rate hikes.

Minutes from the Federal Reserve's April meeting contained no major surprises, doing little to change expectations that the Fed will probably wait until late this year before raising rates.

The dollar index stood at 95.394, having risen as high as 95.837 on Wednesday, recovering from a four-month low of 93.133 hit a week ago after a series of disappointing U.S. data.

"The sentiment is turning favorable on the dollar after all the position-unwinding has been done," said a trader at a Japanese bank in Tokyo.

Reading into the Fed minutes

Minutes of the Fed's meeting showed policymakers believed it would be premature to raise interest rates in June, in line with a view widely held in the market following a dismal start to the year.

"Although they contained no outright surprises, the April FOMC minutes showed a few signs of participants growing more concerned about downside risks to the economic outlook, with little mention of offsetting upside risks," analysts at JPMorgan wrote in a note to clients.

"At this point, we also consider every meeting going forward to be "live", although the last several months' deterioration in the growth data leave June or July looking increasingly unlikely. We still look for lift-off in September."

Against the yen, the greenback stood at 121.17 yen, having scaled a two-month peak of 121.49 on Wednesday.

Read MoreThe Fed will raise rates this year: Bob Doll

The euro last traded at $1.1117, having fallen as far as $1.1062, a low seen late in April, dogged by worries over Greece.

Minutes of the Bank of England's May meeting showed all nine members voted to keep rates at a record low 0.5 percent, but two felt the decision was finely balanced between keeping rates on hold or raising them.

That was enough to spark a turnaround in sterling, which had been sold off earlier in the week after Britain's annual rate of consumer price inflation fell below zero for the first time in more than half a century.

The pound last traded at $1.5553, recovering from a one-week low of $1.5447.

A Chinese manufacturing survey showed continuing weakness there, although widespread expectations that the Chinese authorities would act on any signs of a serious downturn limited the market reaction.

The Australian dollar stood at 79.00 U.S. cents, extending its pullback from 81.64 cents last Thursday.