Dollar Retreats as Treasury Yields Drop Following Trump's Treasury Secretary Pick

The U.S. dollar retreated from two-year highs as Treasury yields dropped following President-elect Trump's announcement of Scott Bessent as Treasury Secretary. The bond market welcomed Bessent for his fiscal conservatism. Market reactions suggest current movements might be temporary amidst ongoing policy uncertainties.

The dollar recoiled from its two-year peak on Monday as U.S. Treasury yields experienced a sharp decline. This followed news that President-elect Donald Trump chose Scott Bessent, an experienced Wall Street fund manager, as the next Treasury Secretary, reassuring investors about fiscal discipline.

The euro gained strength, climbing 0.85% to $1.0506, while the dollar weakened against the yen, dropping 0.58% to 153.85 yen. The bond market's positive response to Bessent's appointment is tempered by his support for a strong dollar, indicating any currency pullback might be brief.

Market activity remained low with the Thanksgiving holiday approaching, and the only significant upcoming data being U.S. GDP and the Personal Consumption Expenditures index on Wednesday. Meanwhile, bitcoin has soared past $96,000, driven by expectations of a lighter regulatory approach under Trump.

(With inputs from agencies.)