The dollar fell and US government bonds rallied after Donald Trump picked Scott Bessent to run the Treasury, a Wall Street veteran who investors expect will take the sting out of the administration’s more aggressive trade and economic policy proposals.

The dollar recoiled from two-year highs on Monday, tracking a sharp decline in U.S. Treasury yields amid trust that Donald Trump's pick for the next U.S. Treasury secretary will promote more fiscal discipline than investors had been fearing.

Bessent has been openly in favor of a strong dollar and has supported tariffs, suggesting any pullback in the currency might be fleeting.