Financial markets on Monday welcomed President-elect Donald Trump’s pick for U.S. Treasury secretary, with currencies across the globe rallying on hopes that hedge fund manager Scott Bessent can take some of the sting out of Trump’s more extreme economic views.

The U.S. dollar index, which measures the greenback against six major currencies, fell 0.5% to 107.01 on Monday, paring some of its recent gains after a remarkable rally since late September.

The euro was a top performer, rising 0.7% to trade at $1.049 at 12:50 p.m. London time. The Japanese yen, pound sterling and Antipodean currencies were also trading higher against the dollar.

The moves come as global investors reacted to news from late Friday that Trump signaled his intention to nominate Bessent to lead one of the most influential roles in U.S. government. The Treasury Department has broad oversight of tax policy, public debt and international finance.

Strategists regard Bessent, the founder of Connecticut-based investment firm Key Square Group, as a “safe pair of hands,” a well-known market participant and a more moderate pick compared to some of his rivals.

It is expected the 62-year-old will push for Trump to consider a softer approach to tariffs, strip back regulation to boost growth and target a reduction in deficit spending.

“Trump’s pick for Treasury Secretary has swelled investor sentiment further with stocks on Wall Street looking set for another flurry of gains,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said in a research note.

“Hedge fund manager Scott Bessent’s long career of navigating the twists and turns of markets, has boosted confidence about incoming pro-business policies and lifted hopes that any tariffs would be highly targeted and potentially less inflationary in nature,” she added.

Trump’s historic election victory earlier this month ratcheted up concerns about the prospect for higher prices, prompting strategists to rethink the outlook for global bond yields and currencies.

It is widely thought that Trump’s pledge to introduce tax cuts and steep tariffs could boost U.S. economic growth — but widen the fiscal deficit and refuel inflation.

In an effort to raise revenues, Trump has suggested he could impose a blanket 20% tariff on all goods imported into the U.S., with a tariff of up to 60% for Chinese products and one as high as 2,000% on vehicles built in Mexico.

While many economists are skeptical about the effectiveness of tariffs, Bessent has defended them as “a useful tool for achieving the president’s foreign policy objectives.” He has also, however, called for tariffs to be “layered in” gradually.

“News that Scott Bessent is the top choice for incoming US Treasury Minister has raised the possibility that some ‘Trump trades’ may be watered down,” analysts at Rabobank said in a research note.

“Bessent, a successful macro hedge fund manager, is associated with a preference to reduce the US budget deficit to 3% of GDP, which clearly suggests less appetite for deficit spending,” they added.

Bessent, who once worked for billionaire philanthropist and investor George Soros, has advocated for a so-called “3-3-3” target, which refers to a plan to cut the deficit to 3% by 2028, achieve 3% economic growth and add 3 million new barrels of oil per day.

Some strategists expect Trump’s Treasury chief pick to be welcomed as good news for Asian currencies over the coming months.

“The market view that Bessent is a ‘safe hands’ candidate, may see some relief rally in Treasuries from the open on Monday, as the risk of a more unorthodox candidate is priced out,” Scott Spratt, strategist at Societe Generale Corporate and Investment Banking, said in a research note.

“We suspect his view that tariffs should be ‘layered’ and that initial levels being discussed are ‘maximalist’ positions, should also provide an opening boost to Asia FX and [the Chinese yuan],” he added.

Tesla CEO Elon Musk suggested that nominating Bessent as Treasury chief would be a disappointment. In a social media post via X on Nov. 16, Musk described Bessent as a “business-as-usual choice,” adding that “business-as-usual is driving America bankrupt.”

Bessent has also been an advocate of Trump’s embrace of the crypto industry, which means he could soon become the first Treasury chief openly in favor of crypto assets. Trump has previously pledged to make America “the crypto capital of the planet.”

Bitcoin breached the $99,000 level for the first time last week as investors continue to price in Trump’s return to the White House.