The dollar fell in value against most other major currencies after US President-elect Donald Trump nominated Key Square Group hedge fund founder Scott Bessent as Treasury Secretary.
The dollar index (DXY) was down 0.64 per cent at a low of 106.8 points as of Monday morning. The selection of a nominee to be the next Treasury Secretary triggered a rally in currencies around the world against the dollar as traders began to reduce bets that Donald Trump’s return would cause turmoil in global markets.
Bessent’s appointment has allayed some fears of a radical economic policy that would structurally increase the US budget deficit, experts at the My Investments project said.
Market participants surveyed by Bloomberg believe that Scott Bessent will take a more gradual approach to imposing duties and will try to curb the budget deficit, which will help the bond market. That’s a positive sign for the US economy and markets, the agency said.
However, the dollar’s gains over the past eight weeks are unlikely to be fully reversed, the publication said. Traders have lowered expectations of Fed easing in 2025 amid concerns that inflation could accelerate.
The Bloomberg Dollar Spot Index rose 0.7 per cent on Friday, marking an eight-week gain, the longest since September 2023. The euro fell to a two-year low against the dollar and the Swiss franc slid to its lowest since July.
