Dollar Strengthens Amid Iran Sanctions and Treasury Buybacks

The US dollar gained strength on Tuesday as investors weighed Washington's expanded sanctions against Iran and efforts to ease pressure on longer-dated Treasury yields.

Treasury Secretary Scott Bessent unveiled an expansion of sanctions against Iran, warning countries to cut business ties or risk being forced out of the dollar-based financial system. This potentially reverses some of the dollar weakness seen at the end of last week.

Ray Attrill, head of FX strategy at National Australia Bank, said: 'That potentially is one source of a slight reversal of the dollar weakness that we had at the end of last week.' The suggestion being made is that countries under sanctions should buy dollars before they lose access to them.

The euro fell 0.1% to $1.1655 and sterling eased from its six-month high, while the Japanese yen weakened to 159.32 per dollar. The dollar index gained 0.1% to stand at 99.07.