Dollar Surges on Iran Sanctions, Canadian Dollar Plunges Amid Escalating Trade Tensions

The US dollar rallied by its largest margin in two weeks due to the United States' expanded secondary sanctions against Iran. Treasury Secretary Scott Bessent's pledge to isolate Iran from the global financial system boosted safe-haven demand, driving broad dollar strength.

Bessent announced an expansion of secondary sanctions targeting countries or entities that maintain business relationships with Iran. The move aims to sever all of Iran's economic lifelines and warns any country trading with Iran would also face US sanctions.

The Canadian dollar fell 0.61% against the US dollar, its largest drop since June 17, due to escalating trade tensions between Canada and the US. President Donald Trump announced tariffs on Canadian autos, trucks, auto parts, and steel would rise to 50% starting January 1, 2027.