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The United States has announced new sanctions targeting Iran, further escalating tensions in the Middle East. National Security Advisor Jake Sullivan revealed late Tuesday that the sanctions will target entities supporting Iran’s Islamic Revolutionary Guard Corps and Defense Ministry.
Sullivan emphasized that these measures aim to contain and degrade Iran’s military capacity, as well as confront its problematic behaviors. The announcement comes amid heightened tensions between Iran and Israel, with Western leaders urging restraint to prevent further escalation.
The Swiss Franc, considered a traditional safe-haven currency, has gained ground as geopolitical tensions intensify. The USD/CHF pair faced selling pressure, dropping to 0.9105 during the early European session. Investors are closely monitoring developments in the Middle East, with any escalation likely to bolster safe-haven assets like the Swiss Franc.
Meanwhile, strong US economic data and hawkish comments from the Federal Reserve continue to support the US Dollar. Federal Reserve Chair Jerome Powell indicated that the US economy has yet to meet the 2% inflation target, signaling a need for continued restrictive monetary policy. These remarks dampen expectations for significant rate cuts this year, contributing to the USD’s strength against other currencies.
According to the CME FedWatch Tool, financial markets have priced in a 67% likelihood of a Fed interest rate cut in September. As tensions in the Middle East persist, investors remain vigilant for further developments that could impact currency markets.
