Dollar Rallies Amid Trade Tensions and Sanctions on Iran

The US dollar has staged a three-day rally against its lowest levels since May amid escalating trade tensions between the US and Canada, as well as the imposition of sweeping sanctions by Washington against Iran.

Operation 'Economic Outcast' launched by Scott Bessent includes sanctions against over 60 organisations, with Tehran's oil smuggling networks also being monitored.

The move has led to a fall in stock indices and a decrease in demand for the greenback as a safe-haven asset. However, the outlook for Brent is 'bullish', despite a six-day rally coming to an end due to the 'buy the rumour, sell the fact' principle.

Brent's long-term prospects are negative, implying further reductions in supplies and rising prices. China's cooperation is crucial, as it buys around 90% of its oil from Iran. Beijing's reluctance to compromise with the US risks triggering a new trade war and slowing down the global economy.