The dollar index was at 98.876, inching away from the three-month high hit on Monday

The dollar held its ground on Wednesday as traders moved to the sidelines, awaiting ​cues on what comes next in the U.S.-Israeli war with Iran while mixed messages on a resolution to the war ‌kept sentiment weak.

The dollar, which has surged as the more than week-long ​war sent oil prices soaring, has given up some of those gains on hopes of a swift resolution, but analysts remain ​sceptical of the war ending so soon.

We expect the war to run for months, not weeks, while ⁠acknowledging the high level of uncertainty, said Kristina Clifton, senior currency strategist at Commonwealth Bank of Australia.

The U.S. and Israel attacked ​Iran which responded very strongly on Tuesday.

Raising the stakes for the ​global economy, Iran said it would block oil shipments from the Gulf unless U.S. and Israeli attacks ceased.

The fast-evolving developments in the Middle East have left traders grappling with how to best price the risk, and for now they appear to be on the sidelines.

Traders are largely ​sitting on their hands and waiting for further news and greater clarity so that risk can be priced more efficiently, said ​Chris Weston, head of research at Pepperstone.

The euro bought $1.16205 in early Asian hours, slightly stronger than the three-month low it hit on Monday. Sterling ‌was ⁠0.12% higher at $1.34305.

The dollar index was at 98.876, inching away from the three-month high hit on Monday.

The risk-sensitive Australian dollar hovered close to the nearly four-year high it hit on Tuesday and bought $0.713.

Much of the Aussie’s gains came after Reserve Bank of Australia Deputy Governor Andrew Hauser on Tuesday warned that the spike in oil prices would ​push inflation higher and add to ​pressure for a rate rise ⁠at its policy meeting next week.

The war in the Middle East has had some large impacts on expectations for central bank interest rates, CBA’s Clifton said. Since the war began at the end of ​February markets have either moved from pricing cuts to pricing hikes, or to pricing less cuts ​than previously.