Dollar Struggles as Iran Sanctions Loom Amid Treasury Buybacks
The US dollar struggled to hold its ground against major peers on Tuesday as investors weighed Washington's expanded Iran sanctions and Treasury buybacks. The euro was a shade higher at $1.1668, near a three-month peak hit last week.
US Treasury Secretary Scott Bessent announced an expansion of sanctions against Iran on Monday, warning countries to cut business ties or risk being forced out of the dollar-based financial system. Ray Attrill, head of FX strategy at National Australia Bank, said this could lead to a reversal of the dollar's weakness.
The Canadian dollar held steady at $1.3844 after a 0.6% dip in the previous session, as the US threatened to raise tariffs on Canadian goods following collapsed trade negotiations.
In cryptocurrencies, Bitcoin was up 1% at $78,817.34, its largest weekly gain in nearly three-and-a-half years last week. However, market participants await Federal Reserve Chair Kevin Warsh's speech in Jackson Hole this Friday for clues about the recent jump in bond yields and reassurance about his independence from the Trump administration.
Market uncertainty has constrained USD gains, with some traders seeking to buy dollars before potential sanctions take effect.