The dollar climbed from a one-week low on Wednesday, while the Japanese yen slid as safety haven demand faded and investors awaited more cues on President-elect Donald Trump’s proposed policies.

The previous day’s boost to the dollar and other traditional safe-haven currencies like the yen proved short-lived after Russia’s foreign minister said the country would “do everything possible” to avoid the onset of nuclear war, hours after Moscow announced it would lower its threshold for a nuclear strike.

The Russia-Ukraine “fears have died back but the market will be sensitive to any renewed news or any fresh news on that front,” said Jane Foley, head of FX strategy, at Rabobank in London.

The yen dropped to 155.67 against the greenback, retracing the previous day’s gains. The yen’s slide to a three-month low upped bets of a likely hawkish shift at the Bank of Japan as it nears levels that drew intervention in July.

Foley said 155 was the dollar-yen level that made markets nervous of intervention, adding that “if there is the possibility that verbal intervention is having a significant impact in stabilizing the currency pair, then that is likely to deter the ministry of finance, at least for a while, from using actual intervention.”

BOJ Governor Kazuo Ueda made only a passing mention of the currency on Monday.

The dollar index – which measures the currency against six major peers – gained 0.3% to 106.42, recovering from a three-day slide.

The index hit a one-year high of 107.07 on Thursday last week, buoyed by expectations for big fiscal spending, higher tariffs and tighter immigration under the incoming U.S. administration, measures that economists say could foster inflation and potentially slow Federal Reserve easing.

“Having priced in a lot of the Trump trade, we might be in consolidation phase until early January when Trump does takes the reins and we get a firmer idea of the detail of the policy,” Foley said.

‘TRUMP TRADE’

Investors are still waiting for Trump to name a Treasury Secretary, one of the highest-profile cabinet posts overseeing the country’s financial and economic policy. Some of Trump’s picks have provoked controversy for their relatively meager relevant experience.

“The ‘Trump Trade’ that boosted the greenback is facing challenges from Trump’s controversial cabinet nominations and the escalation in the Russian-Ukraine war,” DBS strategists wrote in a client note.

For the dollar over the longer term though, “more weight should be put on firm economic data and the increasing likelihood that the Fed may have to slow the rate cut path even more in 2025,” they said.

Traders continue to pare back expectations for an interest-rate cut at the Fed’s next meeting in December. Odds now stand at 59.1%, down from 82.5% a week ago, according to CME’s FedWatch Tool.

Sterling got a brief boost after data showed British consumer inflation accelerated more quickly than forecast in October, supporting the view that the Bank of England will lower interest rates only gradually in the coming months. The pound was last flat at $1.26775.

BoE Governor Andrew Bailey told parliament on Tuesday that the central bank needed to take a “gradual approach” to easing.

Traders currently see an 84% chance that the BoE will hold rates steady at its policy meeting next month.

The euro dipped 0.3% to $1.056, having recovered from a drop to $1.0524 in the previous session.

Bitcoin crept up towards the all-time peak above $94,000 hit overnight, carried by expectations for a friendlier regulatory environment for cryptocurrencies under Trump.

A report said Trump’s social media company was in talks to buy crypto trading firm Bakkt, bolstering hopes of a cryptocurrency-friendly regime under his administration.