Dollar Falters Amid Sanctions and Yield Pressure

The US dollar struggled to hold onto its gains against major peers on Tuesday as investors parsed Washington's expanded Iran-related sanctions and renewed efforts to ease pressure on longer-dated Treasury yields.

The euro was a shade higher at $1.1668, near a three-month peak hit last week, while sterling was 0.1% stronger at $1.3639, near its six-month peak.

U.S. Treasury Secretary Scott Bessent unveiled an expansion of sanctions against Iran on Monday, warning countries to cut business ties with Iran or risk being forced out of the dollar-based financial system.

Ray Attrill, head of FX strategy at National Australia Bank, said that this potentially reverses the dollar's weakness from last week: 'That suggests maybe if you're going to be sanctioned and you're not going to have access to U.S. dollars, then you better buy some dollars first before that happens.'