“The U.S. dollar weakened on Monday and U.S. Treasuries rose after President-elect Donald Trump announced the appointment of Scott Bessent as Treasury Secretary. ”, — write: www.epravda.com.ua
The U.S. dollar weakened and U.S. Treasuries rose on Monday after President-elect Donald Trump announced the appointment of Scott Bessant as Treasury Secretary.
This was reported by the Financial Times newspaper.
The dollar index, which tracks its rate against a basket of currencies including the euro and yen, fell 0.6%. At the same time, the euro rose by 0.6% against the US dollar.
The index rose more than 7% from the start of last month through Friday on expectations that Trump’s economic policies, including tariffs and tax cuts, would boost inflation and raise interest rates in the United States.
However, the choice of Bessent, who last month called the large-scale tariffs a “maximalist” position, is seen by investors as a signal of a possible softening of the president-elect’s policies.
Bessent told CNBC earlier this month that he would recommend introducing tariffs gradually to avoid market shocks.
“Having at least one significant supporter at the cabinet table opposing sustainable trade taxes is a positive for markets,” said Paul Donovan, chief economist at UBS Global Wealth Management.
US government bonds, which had previously declined due to expectations of inflationary pressure, regained their positions. The yield on 10-year bonds fell by 0.06 percentage point to 4.35%. Bond yields move inversely to their prices.
“Everybody was gearing up for an ‘America First’ policy, but now you’re starting to see that it’s not a one-way approach,” said Hugh Gimber, global markets strategist at JPMorgan Asset Management.
He added that the new administration is looking at using the dollar as a more strategic tool to achieve its goals.
Bessent’s appointment is a signal that Trump may not be fully implementing the most inflationary components of his policies, including tariffs, said Vincent Chenault, head of research at Generali Asset Management.
Investors also hope that Bessent, a veteran hedge fund executive responsible for implementing Trump’s economic agenda, will help contain the widening fiscal deficit.