US Dollar Edges Higher After New Iran Sanctions but Remains Near Multi-Month Lows Ahead of PCE Data

The US dollar edged higher on Tuesday, August 25, after the United States launched new measures against Iran, giving the currency a modest lift. Despite the gain, the dollar remained pinned near multi-month lows as markets awaited the upcoming PCE inflation data and a closely watched speech from Federal Reserve Governor Kevin Warsh later in the week. The dollar index held above a key 0.618 support arc, with some analysts targeting a rebound toward 99.22 if that support level continues to hold.

Treasury buyback activity also factored into investor calculations. Against the pound, the dollar stayed under pressure, with GBP/USD holding around 1.3627, near its highest level since mid-February, and UOB analysts projecting an upside bias toward 1.3700. USD/CAD showed more dollar resilience, with a break above the 38.2% Fibonacci retracement level raising the prospect of a move past 1.3900.

Silver, which had rallied alongside dollar weakness in recent weeks, faced rejection near the $70.00 level as upside momentum faded. The overall picture was one of tentative dollar stabilization driven by geopolitical factors, with the market's direction likely determined by the PCE print and Warsh's remarks.