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Dollar softens as traders await US policy signals, sanctions
ING notes potential downside pressure for the dollar if sanctions on Iran and renewed US-Canada trade tensions fuel a risk-on mood and broader dollar long-squeezing.
ING analysts Chris Turner, Francesco Pesole, and Frantisek Taborsky said the US dollar begins the week on the back foot as markets wait for policy signals from the White House and assess multiple catalysts, including Iran-related sanctions and renewed US-Canada trade tensions. The group highlighted focus on possible fiscal consolidation, US core PCE data, and a Jackson Hole speech by Kevin Warsh. They also referenced expectations for scope to squeeze dollar longs and for the DXY to consolidate within a defined range. FXStreet’s write-up of the ING view pointed to sanctions as a key near-term driver, noting a new sanctions announcement on Iran expected from Treasury Secretary Scott Bessent. The analysts added that renewed tariff tensions and the potential impact on trade relationships, particularly involving China as a major buyer of Iran energy, could weigh on the dollar if the market re-escalates quickly.
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