The dollar held steady Wednesday as investors showed cautious optimism about a potential Middle East ceasefire, though mixed signals maintained market uncertainty.
The Japanese yen recovered from its 2024 low of 160.46 per dollar, moving past the psychologically critical 160 level that triggered intervention concerns. The euro reached a one-week high.
The dollar index rose 0.06% to 99.79, while the euro gained 0.11% to $1.1565. The yen remained stable at 158.73 per dollar, and sterling strengthened 0.1% to $1.3235.
"Expectations for a ceasefire are basically rising, so I think the reversal of the long-running 'buy dollars, sell yen' trade is likely to continue," said Sho Suzuki of Matsui Securities.
President Donald Trump scheduled a 9 p.m. EDT address Wednesday to provide an Iran update. Trump indicated the U.S. military campaign against Iran could end within two to three weeks, while Secretary of State Marco Rubio suggested Washington could see the "finish line" in the Iran war.
However, U.S. Defense Secretary Pete Hegseth warned that coming days would be decisive and that the conflict would intensify without a deal from Tehran. The UAE reportedly prepared to help open the Strait of Hormuz by force.
The greenback benefited from safe-haven demand since the February conflict began. As a net energy exporter, the U.S. handles oil disruptions better than other nations.
Friday's March jobs report will show whether employers added the expected 60,000 positions after February's unexpected 92,000 job loss. Labor market weakness could revive Federal Reserve rate cut expectations previously priced out due to Iran war-driven inflation concerns.
Bitcoin fell 0.68% to $67,731.40 while Ethereum declined 0.69% to $2,091.32.