FX.co ★ Dollar Trades Sideways Near Pre-War Levels

The dollar index slipped to just below 98.3 on Wednesday, trading largely sideways and hovering near pre-war levels, as uncertainty in the Middle East persisted despite some short-term relief from an extended ceasefire. US President Trump announced an indefinite extension of the ceasefire with Iran shortly before its scheduled expiration, aiming to allow more time for peace talks. He also signaled that no new attacks were planned, though the blockade of the Strait of Hormuz would remain in force. At the same time, reports indicated that Iran had received “some indication” that the US might be prepared to ease the blockade. Still, the timing of any formal negotiations remains unclear. Meanwhile, Federal Reserve nominee Kevin Warsh pledged to preserve the Fed’s independence from the White House while pursuing broad reforms, a position seen as more hawkish than markets had anticipated. The Fed is set to decide on monetary policy next week, and no change in the federal funds rate is expected.