US Dollar Soft Amid Policy Anticipation

The US dollar has started the week on a soft footing as investors await fresh policy updates from the White House. The market is looking at two key announcements: economic sanctions against Iran and potential fiscal consolidation plans.

A new set of sanctions on Iran, announced by US Treasury Secretary Scott Bessent, could impact trade ties with China, which remains the largest buyer of Iranian energy imports.

Additionally, the prospect of fiscal consolidation has raised concerns about the burden being placed on efficiency gains rather than substantial spending cuts or tax rises. The US Treasury market is still recovering from last week's stress, and this week's $44bn auction of seven-year Treasuries will be closely watched.