Dollar Struggles Near Three-Month Lows Amid Sanctions and Fiscal Concerns

The US dollar struggled to gain momentum on Tuesday, hovering near three-month lows amidst concerns over Washington's expanded sanctions against Iran and unresolved fiscal anxieties. Despite a slight bounce to 98.89, the greenback remained anchored within striking distance of its three-month low of 98.5 touched last week.

Currency allocators chose to focus on the relentless growth of US sovereign debt obligations and the threat of persistent cost-push inflation, rather than diplomatic headlines. The dollar's listless price action underscores how quickly market attention is shifting away from aggressive long-dollar exposure.

The British pound outperformed its G10 peers, inching higher for a fifth consecutive trading session as resilient service-sector pricing continues to support sterling. Meanwhile, the Japanese Yen weakened 0.2%, pushing the dollar/yen exchange rate up to 159.35.