Iranian rial hits record low before fresh US sanctions
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Iran's rial has slumped to a record low against the US dollar, coinciding with a warning from US Treasury Secretary Scott Bessent of an approaching "economic D-day" for Tehran ahead of fresh US sanctions. The currency collapse formed part of a broader bout of global market turbulence, which also took in a flare-up in US-Canada trade relations and a sell-off in government bonds that pushed yields to multi-decade highs before easing back towards the end of the period.
The Canadian dollar fell 0.2% to C$1.3798 per US dollar after talks between Washington and Ottawa broke down, with Prime Minister Mark Carney saying Canada was "walking away from a bad deal"; the US imposed 50% tariffs on $20bn of Canadian goods, and Canada said it would retaliate from 8 September on items including wine, dairy and electronics. Asian markets slid sharply, with Hong Kong's Hang Seng down 1.9% and South Korea's Kospi down 3.2%, while oil prices were volatile amid the Iran standoff. Bond markets, which had seen the US 10-year Treasury yield and UK gilt yields hit their highest levels in decades, later stabilised after the US Treasury said it would at least double purchases of longer-dated debt, though analysts warned yields could rise further given the poor US fiscal position and upcoming risks such as the Federal Reserve's Jackson Hole conference.
- Iranian rial hit a record low ahead of new US sanctions
- Bessent warned of Tehran's approaching "economic D-day"
- US-Canada trade talks collapsed, triggering fresh tariffs
- Asian stocks fell and bond yields hit decade highs before easing
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Iran's currency, the rial, is used domestically but has little value abroad because the country's economy has long been squeezed by international sanctions, chiefly imposed by the United States over its nuclear programme and other policy disputes. Those sanctions restrict Iran's ability to sell oil and trade with the outside world, which has repeatedly driven the rial down and pushed up prices for ordinary Iranians. The US Treasury oversees and enforces these sanctions, and its officials periodically signal that further restrictions are coming.
The rial's fall is happening alongside separate turbulence in global trade and markets, notably a breakdown in talks between the US and Canada that has led both countries to impose new tariffs on each other's goods. Tariffs are taxes on imports, and disputes like this can unsettle investors because they raise costs for businesses and consumers and create uncertainty about future trade rules.
Together, these events matter because currency and trade tensions can ripple beyond the countries directly involved, affecting stock markets, oil prices and investor confidence worldwide. Central bank decisions, such as those made by the US Federal Reserve, are also closely watched at times like this, since they influence borrowing costs and economic growth across many countries.
More coverage
- NPR — Treasury Secretary Scott Bessent to unveil new economic sanctions on Iran
- The Hill — Live updates: Trump administration ramps up Iran pressure as ‘economic D-Day’ arrives
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Originally published by The Guardian as “Iran’s rial falls to record low as Scott Bessent warns of ‘economic D-day’ – business live”.