The US Dollar Index was last up 0.1% at 99.065, after gaining 0.2% overnight

The U.S. dollar rebounded slightly on Tuesday, as investors assessed expanded U.S. sanctions on Iran and renewed efforts by Washington to ease pressure on longer-dated Treasury yields.

The US Dollar Index was last up 0.1% at 99.065 by 06:26 GMT, after gaining 0.2% overnight.

Still, the index was not far from three-month lows near 98.5 touched last week.

The U.S. currency had gained on Monday after the country’s treasury secretary announced wider sanctions targeting Iran, but the move failed to generate sustained demand for the currency as investors remained concerned about U.S. fiscal risks.

Treasury secretary said countries and businesses continuing to trade with Iran risked being shut out of the dollar-based financial system.

Iran vowed to retaliate against the measures, with officials telling media that they were confident their major trading partners would resist Washington’s influence.

The yen weakened on Tuesday with the USD/JPY pair adding 0.2% to 159.35 yen.

The South Korean won’s USD/KRW pair edged up 0.2%, while the Indian rupee’s USD/INR was largely unchanged.

The Australian dollar’s AUD/USD pair was also muted.

Minutes from the Reserve Bank of Australia’s August meeting showed that policymakers were divided over whether inflation risks warranted another hike.

In U.S. Treasuries, yields eased slightly after reports that the Treasury could use cash in its almost $940 billion General Account to fund purchases of longer-dated debt.

The move would complement plans to double quarterly buybacks of 10- to 30-year securities to $4 billion per operation from September 10.

Despite the measures, Treasury yields remained higher, keeping pressure on borrowing costs and limiting the dollar’s ability to sustain its rebound.