The US dollar hovered near multi-month lows on Monday, with trading disrupted by the Treasury's announcement of expanded long-dated debt buybacks. Market participants were also awaiting details on potential Iran sanctions and a week packed with policy speeches from US and Japanese officials.

Trade frictions put pressure on the Canadian dollar, as the US imposed a 50% tariff on Canadian goods and Canada prepared retaliatory measures. The loonie slipped 0.5% to 1.3836 per US dollar. The greenback has been broadly weaker in recent days.

The euro traded at $1.1665, easing slightly on the day but remaining close to the three-month high touched last week. Sterling also dipped to $1.3628, hovering near the six-month peak of $1.3675 recorded on Friday. The Japanese yen edged lower to 159.25 per dollar.

Over the weekend, Bitcoin posted its largest weekly drop against the dollar in roughly three and a half years, while gold also surged against the greenback as concerns resurfaced that US efforts to cap yields could undermine confidence in the currency. Global long-dated bond yields have been climbing, driven by brighter growth prospects, rising inflation expectations, and mounting worries over rapidly expanding sovereign debt.

Last week, after the 30-year Treasury yield hit its highest level in nearly two decades, the US Treasury announced it would double its single-operation long-bond repurchase size to $4 billion. Relative to the $32 trillion bond market, the buyback amount is modest, but the signal of intervention has unsettled traders and weighed on the dollar.

Mark Ostwald, chief economist and global strategist at ADM International Investment Services, noted: "The more Treasury Secretary Scott Bessent tries to lean on yields, the more the market pushes back."

"That's why we saw last week: concerns about currency debasement lifted gold and Bitcoin; investors began trimming holdings of G7 government bonds, particularly as they see no real action to curb fiscal deficits."

The offshore yuan posted its eighth consecutive weekly gain, with the onshore rate hovering near 6.7236 per dollar, close to a three-and-a-half-year high.

Sanctions and policy in focus

Bessent, who has threatened "the toughest sanctions ever" on Iran, is scheduled to hold a press conference at 17:00 GMT. Iran's foreign minister dismissed the latest US sanction threats as a sign of American desperation.

On Friday, Federal Reserve Chair Kevin Warsh is set to address the Jackson Hole symposium in Wyoming, where markets will seek clues on the US rate trajectory. He is also likely to face questions about the Treasury's bond buyback program.

Yu Fu, a strategist at Bank of New York, commented: "Any comments on the balance sheet, duration supply, or term premium could have a greater impact on long-end yields than economic data itself. However, Warsh has consistently been measured in his language, so we shouldn't expect too much."

Bank of Japan Deputy Governor Ryozo Himino is scheduled to speak on Thursday, seen as a preview of next month's policy meeting. Investors will watch whether he pushes back against market pricing for faster rate hikes in Japan.