(Bloomberg) — The dollar fell and Bitcoin’s rally stalled as traders viewed Donald Trump’s pick of Scott Bessent for Treasury Secretary as a measured choice, tempering some of the more fevered bets spurred by the president-elect’s victory.
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The greenback declined against major peers with the Aussie and euro leading gains, while Bitcoin fell below $97,000 before paring losses. Equity futures in Australia and Japan point to early gains Monday after US stocks rose 0.4% on Friday. Contracts in Hong Kong were steady.
The early moves indicate elements of the so-called Trump Trade are cooling after the incoming president named Bessent, who runs macro hedge fund Key Square Group, to oversee the US government debt market, tax collection and economic sanctions. While Bessent indicated he’ll back Trump’s tariff and tax cut plans, investors expect he will prioritize economic and market stability over scoring political points.
“Following his other nominations, and the drawn-out battle among the contenders for the Treasury job, you could literally hear the sigh of relief from financial markets participants in the US when Bessent was announced,” Erik Nielsen, chief economics advisor at UniCredit Bank GmbH wrote in a note to clients.
Bessent’s nomination may ease some concerns over Trump’s impact on other countries’ economies and currencies around the world.
The dollar has now climbed for eight straight weeks, the longest advance in more than a year, as traders continued to price Trump’s fiscal policies including sweeping trade tariffs and persistent economic growth. The euro fell to a two-year low and the Swiss franc slid to the weakest against the greenback since July as speculative investors turned the most bullish on the dollar since late June.
US stocks rose on Friday, with the S&P 500 gaining 0.4% as beneficiaries of the incoming administration’s looser regulation and business-friendly stance climbed. The Treasury curve flattened, with yields on 2-year notes climbing after strong US business activity data. Benchmark 10-year yields edged lower. Australia’s equivalent fell seven basis points in early Monday trading.
The ongoing conflict in Ukraine helped to push West Texas Intermediate crude above $71 a barrel while gold traded at over $2,700 an ounce, and had its best week since March 2023.
