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 Israelthe primary U.S. ally in the two-month-old warwould 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 Britains 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.