* Strait of Hormuz at standstill remains a worry for

investors

* Iran rejected last round of talks before ceasefire

extension

* It remains to be seen if Iran or Israel agrees to

extend ceasefire

* Markets looking past developments, pinning hopes on

peace deal

(Updates prices for European market open)

By Lawrence White

LONDON, April 22 (Reuters) - U.S. stock futures rose,

the dollar wavered and oil prices fell below $100 on Wednesday

after President Donald Trump said he would indefinitely extend

the Iran ceasefire.

That said, optimism about an end to the war that has shaken

the global economy remained muted as the Strait of Hormuz

remained mostly closed and there was no sign of a resumption in

U.S.-Iran talks.

Trump's announcement appeared to be unilateral, and it was

not immediately clear whether Iran, or U.S. ally Israel, would

agree to extend the ceasefire, which began two weeks ago. Iran

had rejected a second round of negotiations before Trump's

announcement.

S&P futures rose 0.6% while Nasdaq futures

gained 0.7%. Europe's benchmark STOXX index edged up

0.1% in early trade, while MSCI's broadest index of Asia-Pacific

shares outside Japan dropped 0.5% after hitting

a seven-week top on Tuesday.

Thomas Mathews, head of markets for Asia-Pacific at Capital

Economics, said the earlier ceasefire was widely seen as

indefinite so it was not surprising the latest announcement had

not moved markets much.

"Obviously, any news on the re-opening of the Strait is a

good candidate for the next big market flashpoint," Mathews

added.

HORMUZ REMAINS KEY

Although the war caused a sharp selloff in March, equity

markets across the globe have swiftly rebounded this month to

pre-war levels as the prospect of a peace deal and the ceasefire

spurred a risk-on rally.

That has also left the U.S. dollar, which benefited from

safe haven demand in March, on the back foot, giving up most of

its war-induced gains.

"It appears markets were right to assume peak war

uncertainty is behind us," said Matt Simpson, a senior market

analyst at StoneX. "Risk seems likely to remain buoyant and dips

viewed favourably by equity bulls. The closure of the Strait of

Hormuz is already priced in."

The dollar index, which measures the U.S. currency

against six peers, was last at 98.27. Although it is hovering

near its highest in a week, it is down 1.5% in April after

rising about 2.3% in March.

Trump said he would continue the U.S. Navy's blockade of

Iran's ports and shores.

Oil prices dipped, with Brent crude futures down 32

cents or 0.3% at $98.16 a barrel after nearly touching $100

earlier in the session.

While oil prices have come down from their March peaks they

are still well above pre-war levels, worrying investors that

elevated energy prices could quicken inflation and keep global

rates higher for longer.

WARSH SENATE APPEARANCE

Investors parsed comments from Federal Reserve chief nominee

Kevin Warsh as he tried to assure U.S. senators considering his

confirmation to lead the central bank that he ​would act

independently of the White House.

Warsh said he had made no promises to Trump about cutting

rates and called for a new approach to controlling inflation and

a communications overhaul that could discourage his colleagues

from saying too much about the direction of monetary policy.

Separately, data on Tuesday showed U.S. retail sales rose

more than expected in March as the war with Iran boosted

gasoline prices and led to a record surge in receipts at service

stations, while tax refunds underpinned spending elsewhere.