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.

Trump has nominated Scott Bessent, a hedge fund manager, and the dollar has tanked as a result. He takes over from the 78-year-old Janet Louise Yellen.