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Dollar edges lower as Iran sanctions and Treasury buybacks weigh

The dollar index slipped 0.07% to 98.92, while the euro rose 0.09% to $1.1673 as bets on a September Fed rate hike eased.

Reported · Written up by our desk · Major Pairs

The U.S. dollar edged lower on Tuesday as investors weighed Washington's expanded sanctions against Iran and renewed efforts to ease pressure on longer-dated Treasury yields, according to Reuters.

The dollar had weakened late last week after U.S. Treasury Secretary Scott Bessent said the Treasury would double the size of its quarterly repurchases of longer-dated bonds, raising concerns about how the program could affect the currency. A CNBC report that the Treasury could use part of its cash balance to buy back longer-dated bonds, along with a drop in crude oil prices, helped push yields lower on Monday, a move that continued into Tuesday.

Concerns around dollar fundamentals were also tied to shifting rate expectations. CME FedWatch showed the probability of a Federal Reserve rate hike of at least 25 basis points at the September meeting falling to 40.1% from about 55% a month earlier.

Against other currencies, the dollar index, which tracks the greenback versus a basket of currencies, fell 0.07% to 98.92, while the euro rose 0.09% to $1.1673. The expansion of Iran sanctions was viewed as having limited detail, with no mention of major trade partners such as China, though Bessent warned countries to cut business ties with Tehran or risk being forced out of the dollar-based financial system.

Latest closeWTI crude $82.40 ▲1.4%|Dollar index 99.64 ▼0.3%

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