Dollar Struggles Amid Sanctions and Treasury Buybacks

The US dollar struggled to maintain its gains against major currencies on Tuesday as investors weighed Washington's expanded Iran-related sanctions and efforts to ease pressure on longer-dated Treasury yields.

The euro held near a three-month peak at $1.1668, while sterling was stronger by 0.1% at $1.3639, near its six-month high.

US Treasury Secretary Scott Bessent announced the expansion of sanctions against Iran on Monday and warned countries to cut business ties with Iran or risk being forced out of the dollar-based financial system.

Ray Attrill, head of FX strategy at National Australia Bank, said that this could be a source of dollar strength due to investors seeking to buy dollars before they lose access to US finance.