By Jiaxing Li and Johann M Cherian Aug 25 The U.S. dollar regained some strength on Tuesday, as investors parsed Washington’s expanded sanctions against Iran and renewed efforts to ease pressure on longer-dated Treasury yields, while cryptocurrencies extended a rally on…
Treasury Secretary Scott Bessent unveiled an expansion of sanctions against Iran on Monday, warning countries to cut business ties with Tehran or risk being forced out of the dollar-based financial system. “That potentially is one source of a slight reversal of the dollar weakness that we had at the end of last week,” Ray Attrill, head of FX strategy at National Australia Bank, said in a podcast. “The suggestion being that, maybe if you’re going to be sanctioned and you’re not going to have access to U.S. dollars, then you better buy some dollars first before that happens.” The euro was a touch softer at $1.1659, on track for a second day of decline after hitting a three-month peak last week. The Swiss franc also weakened a touch to 0.8039 per dollar and was heading for its fourth straight day in the red, easing from the one-month high it hit in the week before. As well as the overnight sanctions announcement, currency traders continue to process the trade dispute between the U.S. and Canada, as well as the state of play in the U.S.
Treasury market. The former was weighing on the Canadian dollar, which weakened for a second day against its U.S. counterpart. The U.S. dollar was last up 0.1% at C$1.3860, having jumped 0.6% on Monday, its biggest daily gain in two months.