USD firms vs EUR/USD and JPY as Bessent widens Iran sanctions threat to China

The dollar index pushed higher toward the 99.50 area, with EUR/USD slipping around 0.3% to the 1.1620 zone and USD/CHF finding demand near 0.8050 as safe-haven flows rotated. Treasury Secretary Bessent said no country is beyond the reach of US sanctions on Iran, including China, adding that Washington wants 'zero leakage,' that nations identified as facilitating Iranian activity face a finite timeline before Treasury authorities are used, and that he expects a major financial institution to be sanctioned this week. Secondary sanctions risk raises the prospect of dollar-clearing disruption, which typically tightens offshore dollar funding and supports USD. USD/CNH firmed toward 7.15 on the China escalation, while commodity currencies underperformed on trade-war contagion risk, though CAD found partial offset from firmer crude. Traders should watch EUR/USD support at 1.1580 and resistance at 1.1680, with USD/JPY pinned between 146.80 support and 148.00 resistance as haven demand for both legs offsets. Headline-driven volatility argues for wider stops and reduced position sizing.