Dollar Dips as Market Reacts to Bessent's Treasury Pick

The U.S. dollar retreated from two-year highs as markets responded to Donald Trump's appointment of hedge fund manager Scott Bessent as Treasury Secretary. The announcement sparked a rally in Treasury markets, lowering yields and interest rate advantages of the dollar amid mixed economic signals.

The U.S. dollar stepped back from its two-year highs on Monday, responding to President-elect Donald Trump's choice of Scott Bessent, a hedge fund manager, for the role of Treasury Secretary. Investors anticipate Bessent to enforce more fiscal discipline than initially feared.

The Treasuries rallied following the announcement late Friday, with 10-year yields dipping by 14 basis points—the most significant drop since early August. Consequently, two-year yields also fell, diminishing the dollar's interest rate advantage.

The euro rose and the dollar weakened against the yen. Traders view Bessent as a fiscal conservative but note his strong dollar preference, suggesting any rollback might be temporary.

(With inputs from agencies.)