Dollar Stabilizes as Market Braces for Iran Sanctions

The US Dollar stabilized on Monday, allowing the Euro to hold its ground at around 1.1670. This level is reminiscent of mid-May, and the stability comes after last week's surprise announcement by the US Treasury, which sparked volatility in markets.

The US Dollar Index (DXY) is attempting to reclaim 99.00, currently trading at 98.95. Despite this near-term stabilization, concerns over US fiscal policy and rising government debt remain a concern for investors.

The market's attention has shifted to the impending announcement of fresh sanctions against Iran by the United States. Treasury Secretary Scott Bessent described it as an 'economic D-Day', while Iran's Foreign Ministry Spokesperson Esmaeil Baghaei vowed that the country will use all its bilateral capabilities to confront US economic sanctions.

The Federal Reserve (Fed) is set to release the Personal Consumption Expenditures (PCE) Price Index on Wednesday, which could further impact market expectations for interest rate changes in September. Fed Chair Kevin Warsh's remarks at the Jackson Hole Symposium on Friday will also be closely watched.