Dollar Dips Amid Scott Bessent's Treasury Appointment

The U.S. dollar retreated from two-year highs after President-elect Donald Trump announced hedge fund manager Scott Bessent as the likely Treasury Secretary. Investors anticipate disciplined fiscal policies, yet the dollar's current advantage receded due to market reactions and holiday-thinned trading.

The U.S. dollar took a step back from two-year peaks on Monday following the announcement of Scott Bessent, a hedge fund manager, as President-elect Donald Trump's anticipated choice for Treasury Secretary. Financial markets reacted optimistically, hoping for disciplined fiscal policies under Bessent's leadership.

The subsequent rally in U.S. Treasuries resulted in a significant drop in yields, with 10-year Treasury yields decreasing by 14 basis points, marking the largest decline since August. This market adjustment also affected the dollar's interest rate edge, allowing the euro and yen to gain ground.

Market analysts noted the thin trading environment ahead of the U.S. Thanksgiving holiday, alongside cautious market positioning, contributed to the dollar's retreat. Anticipations of potential policy changes and economic data for the week ahead keep investors attentive to upcoming economic indicators.

(With inputs from agencies.)