Dollar Steadies Amid Sanctions Uncertainty and Fed Rate Hike Odds

The US dollar has steadied after US Treasury Secretary Scott Bessent's comments on expanding sanctions against Iran and renewed efforts to ease pressure on longer-dated Treasury yields.

Bessent's statement that the Treasury would double the size of quarterly repurchases of longer-dated bonds unnerved investors, sparking concerns about a shift to a more interventionist strategy to curb borrowing costs ahead of mid-term elections later this year.

According to Trade Nation senior market analyst David Morrison, 'Trump wants borrowing costs down. I imagine he appreciates the fact that the Fed can only really control the overnight rates. And so why wouldn’t the Treasury get in there and attempt to push yields at the longer end down?'