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Dollar holds near 99 as safe haven demand rises on geopolitics

The dollar’s push is supported by expanded US secondary sanctions tied to Iran, while potential Fed and US data events later this week could affect near-term gains.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, which tracks the greenback against six major currencies, held gains for a second straight day and traded around 99.00 during Asian hours, as safe haven demand rose amid escalating geopolitical tensions, FXStreet reports. The article points to US secondary sanctions, including an expansion targeting entities trading with Iran, and warns that a major financial institution could face enforcement action, with clarification that Chinese entities will not be exempt from the measures. Even with those geopolitical tailwinds, further upside for the dollar may be limited by planned changes to Treasury bond buybacks. FXStreet says the US Treasury is expected to double its buyback operations for longer-dated bonds, potentially using up to $1 trillion from the Treasury General Account, a move that could affect market liquidity and yields. Attention is also shifting to a heavy US data and policy calendar, including Tuesday’s consumer confidence report, Wednesday’s PCE inflation gauge, and a Friday address by Fed Chair Kevin Warsh at Jackson Hole. Strategists at Scotiabank cited in the piece say the week’s event risk is significant and that moderate dollar gains could come as investors pare back positioning, rather than a full reversal of the underlying trend.

Latest closeDollar index 99.64 ▼0.3%

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