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 debasement fears.
U.S. Treasury Secretary Scott Bessent unveiled an expansion of sanctions against Iran on Monday, warning countries to cut business ties with it 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 EUR= was down roughly 0.1% at $1.1655, on track for a third day of decline after hitting a three-month peak last week. Sterling GBP=D3 also eased from a six-month high, last at $1.3624.
The Japanese yen JPY= weakened to 159.32 per dollar, having given back most of its intervention gains but still well off a multi-decade low of about 164.
The dollar index =USD, which measures the U.S. currency against six major peers, gained 0.1% to stand at 99.07. That extended a gain of 0.16% overnight, further lifting it from three-month lows amid a revived debasement trade.
The Canadian dollar CAD=D3 weakened 0.1% to $1.3860, extending a dip of 0.6% in the previous session, as the United States threatened to raise tariffs on Canadian goods after trade talks collapsed.
The New Zealand dollar NZD=D3 and the Australian dollar AUD=D3 were flat, trading at $0.5955 and $0.7152, respectively.
However, cryptocurrencies bucked the dollar's strength as debasement fears fuelled momentum. Bitcoin BTC= crossed the $80,000-mark for the first time since mid-May, taking its gains for the month to nearly 30%.
TLT•
