The U.S. dollar stabilized on Wednesday near one-week highs amid continued uncertainty regarding the Middle East conflict, even after U.S. President Donald Trump announced an indefinite extension of the ceasefire with Iran.

Despite this announcement, it remained unclear whether Iran or Israel—the primary U.S. ally in the two-month-old war—would agree to the extension. Prospects for resuming peace talks remained uncertain as the vital Strait of Hormuz for oil shipments stayed largely closed, with reports indicating three vessels came under fire.

The U.S. dollar index, which measures the currency's performance against a basket of six major currencies, was stable at the 98.341 level.

Dominic Banning, head of G10 FX strategy at Nomura, stated that it is difficult to form a strong conviction at this time, but noted that both parties seem more inclined toward making progress rather than escalation, though this outlook remains cautious.

Most other currencies remained unchanged; the euro stabilized at $1.1745, while the British pound reached $1.3511. Data released Wednesday showed that Britain’s annual inflation rate rose to 3.3% in March compared to 3.0% in February, marking the first signal of the Middle East war's impact on prices.

Against the Japanese yen, the dollar fell slightly to 159.22 yen following data showing that Japanese exports grew for the seventh consecutive month, overcoming the effects of the conflict in the Gulf.

In another context, investors monitored statements by Kevin Warsh, the White House nominee for Federal Reserve Chair, during his Senate confirmation hearing, which were interpreted as leaning toward monetary hawkishness.

Warsh emphasized that he made no pledges to President Trump regarding interest rate cuts, attempting to reassure lawmakers that he would maintain the central bank's independence while pursuing broad reforms.

Junya Tanase, chief FX strategist at JPMorgan in Tokyo, said the highlight of Warsh's remarks was his emphasis on Federal Reserve independence and his rejection of pressure to cut rates, reflecting a hawkish tone.

However, he noted that the impact of these statements was limited as market expectations did not change significantly, suggesting that dollar strength and rising U.S. bond yields were primarily driven by higher oil prices linked to tensions with Iran.

Traders scaled back expectations regarding the timing of interest rate cuts, as markets remain unconvinced of the possibility of monetary easing before 2027. There is a 58.5% probability that the Federal Reserve will keep interest rates unchanged through the April meeting of next year, according to the CME Group's FedWatch tool.

In the cryptocurrency market, Bitcoin rose by 3.28% to $78,225, and Ethereum climbed 3.22% to $2,392.

Gold prices rose in the European market on Wednesday, moving up from a one-week low supported by the current slowdown in the American currency. This comes after U.S. President Donald Trump announced an indefinite extension of the ceasefire with Iran.

Statements by Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance; however, markets are still waiting for more evidence regarding the path of U.S. interest rates.

Price Overview

- Gold Prices Today: Gold metal prices rose by 1.1% to ($4,772.41), from an opening level of ($4,719.37), and recorded a low of ($4,715.69).

- Upon price settlement on Tuesday, gold prices lost about 2.2% in their second consecutive daily loss, reaching a one-week low of 4,668.74 dollars per ounce due to Iran's refusal to participate in the peace negotiations scheduled in Pakistan.

The U.S. Dollar

The dollar index fell on Wednesday by 0.2%, retreating from a high of 98.57 points, reflecting a slowdown in the American currency's levels against a basket of major and minor currencies.

Beyond correction and profit-taking, U.S. dollar levels are declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

U.S. Interest Rates

- Kevin Warsh, the nominee for a senior position on the Federal Reserve Board, stated on Tuesday that he has made no promises to Trump regarding interest rate cuts.

- According to the CME Group's FedWatch tool: the probability of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, while the probability of a 25-basis-point hike stands at 1%.

- To re-price these probabilities, investors are closely following the release of more economic data from the United States.

Gold Performance Expectations

Edward Meir, an analyst at Marex, said: "With this ceasefire extension, markets see a decrease in the intensity of the crisis in the Middle East."

Meir added: "If the ceasefire ends and hostilities resume, we will see an increase in the value of the dollar and a rise in oil prices and interest rates, which will negatively affect gold prices."

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained virtually unchanged on Tuesday, with the total staying at 1,059.76 metric tons.

The British pound rose in the European market on Wednesday against a basket of global currencies, beginning a recovery from a one-week low against the U.S. dollar. The pound capitalized on the slowdown of the American currency following President Trump's announcement to extend the ceasefire with Iran indefinitely.

This move into positive territory comes ahead of the release of key UK inflation data for March, which will provide crucial evidence regarding the probability of the Bank of England (BoE) raising British interest rates in the near term.

Price Overview

- British Pound Exchange Rate Today: The pound rose against the dollar by 0.1% to ($1.3520), from an opening price of ($1.3506), and recorded a low of ($1.3498).

- On Tuesday, the pound lost 0.2% against the dollar and recorded a one-week low of 1.3475 dollars due to Iran's refusal to participate in peace negotiations with the United States.

The U.S. Dollar

The dollar index fell on Wednesday by 0.1%, retreating from its high of 98.57 points, reflecting a slowdown in the American currency's levels against a basket of global currencies.

Beyond correction and profit-taking, U.S. dollar levels are declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Regarding monetary policy, statements by Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance, while strong retail sales data provided an optimistic outlook for the U.S. economy's performance during the first quarter of this year.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

British Interest Rates

- The Bank of England warned after its last meeting that inflation will rise in the near term due to higher energy prices caused by the Iranian war.

- Market pricing for the probability of the Bank of England raising British interest rates at its April meeting is stable at around 25%.

UK Inflation Data

To re-price the existing probabilities regarding British interest rates, investors are waiting later today for the release of key inflation data in the United Kingdom for March, which is expected to significantly influence the Bank of England's monetary policy path.

The headline Consumer Price Index (CPI), due at 06:00 GMT, is expected to rise by 3.3% annually in March, up from 3.0% in February, while the Core CPI is expected to remain stable at an annual increase of 3.2%.

British Pound Performance Expectations

If the British inflation data comes in higher than market expectations, the probability of a British interest rate hike in April will rise, which will strengthen the current gains in the levels of the British pound.

The Japanese yen rose in the Asian market on Wednesday against a basket of major and minor currencies as part of recovery attempts from a one-week low against the U.S. dollar. The yen benefited from a slowdown in the American currency following President Trump's announcement to extend the ceasefire with Iran indefinitely.

The probability of the Bank of Japan (BoJ) raising interest rates during its April meeting remains weak, especially after Governor Kazuo Ueda refrained from pledging to normalize monetary policy in the near term due to the impact of the Iranian war on economic forecasts.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar fell against the yen by 0.1% to (159.17¥), from today’s opening price of (159.32¥), and recorded a high of (159.42¥).

- The yen ended Tuesday's trading down by 0.3% against the dollar, its second consecutive daily loss, reaching a one-week low of 159.64 yen after Iran refused to participate in the second round of peace negotiations in Pakistan.

The U.S. Dollar

The dollar index fell on Wednesday by 0.1%, retreating from a high of 98.57 points, reflecting a slowdown in the levels of the American currency against a basket of global currencies.

Beyond correction and profit-taking, the U.S. dollar is declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Regarding monetary policy, the statements of Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance, while strong retail sales data provided an optimistic outlook for the U.S. economy's performance during the first quarter of this year.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

Japanese Interest Rates

- BoJ Governor Kazuo Ueda has recently refrained from pledging to raise interest rates in April, given the war's impact on economic projections.

- The market pricing for the probability of the Bank of Japan raising interest rates by a quarter percentage point in April is currently stable around 10%.

- To re-price these probabilities, investors await further data on inflation, unemployment, and wages in Japan.