Dollar Recovers as Iran Sanctions and Treasury Buybacks Weigh

The US dollar gained some ground on Tuesday after Washington expanded sanctions against Iran and renewed efforts to ease pressure on longer-dated Treasury yields. The move sparked a slight reversal in the dollar's weakness from last week, according to Ray Attrill, head of FX strategy at National Australia Bank.

US Treasury Secretary Scott Bessent unveiled an expansion of sanctions against Iran on Monday, warning countries to cut business ties with it or risk being forced out of the dollar-based financial system. The euro fell roughly 0.1% to $1.1655 and sterling eased from a six-month high as investors weighed the implications of the sanctions.

The Japanese yen weakened to 159.32 per dollar, having given back most of its intervention gains but still well off a multi-decade low of about 164. The dollar index gained 0.1% to stand at 99.07, extending a gain of 0.16% overnight.

Cryptocurrencies, however, bucked the dollar's strength as debasement fears fueled momentum. Bitcoin crossed the $80,000-mark for the first time since mid-May, taking its gains for the month to nearly 30%.