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The world’s primary reserve currency rose against almost all of its major peers Monday and a Bloomberg dollar gauge is up about 1.2% over two sessions. That’s the most since the aftermath of President Donald Trump’s rollout of sweeping tariffs 10 months ago roiled markets.

Gold and silver both sank Monday, adding to a slide that began last last week after Trump said he’d nominate Kevin Warsh to succeed Jerome Powell as Federal Reserve chair. Markets see Warsh as more inclined than other candidates to fight against rising price pressures. That stance may translate into monetary policy aiding the dollar, eroding the so-called debasement trade that had caused gold to soar.

“The unwinding of the metals rally, especially in gold and silver, is driving the dollar’s strength,” said Andrew Hazlett, a foreign-exchange trader at Monex Inc. “Weak and overleveraged hands are being shaken out and the dollar is getting all the benefit from it, since the move into metals was primarily driven by debasement considerations.”

Geopolitical events also rippled through currencies, after the US president said US and Iran are talking, driving oil lower. The Swiss franc, Norwegian krone and Canadian dollar were among worst performers in the Group of 10. The greenback also rose along with Treasury yields after solid US factory data.

The dollar rebound from near a four-year low may have caught some investors off guard, given shorting the greenback was one of the most popular macro trades last month. Until the end of last week, Trump’s threats to acquire Greenland and his apparent acceptance of the currency’s selloff had only fueled debate around the greenback’s long-term decline.

Options pricing remains bearish on the greenback overall, though positioning has moved away from last week’s extremes. On Jan. 27, the premium to hedge against dollar losses over the following month widened to a record.

“The foreign-currency market is normalizing after the dollar selling frenzy of January,” said Erik Nelson, a strategist at Wells Fargo. The market is unwinding of all the speculative and momentum-chasing dollar shorts that were established in mid-January, he said.

Asset managers boosted their bearish dollar positioning just days before news of Warsh’s nomination triggered the greenback’s biggest gain since May. Month-end flows may have amplified the greenback’s rebound, according to Europe-based traders, particularly as the technical backdrop pointed to a corrective move.

Many market participants have warned of further dollar weakness. DoubleLine Capital Chief Executive Officer Jeffrey Gundlach said last week the greenback hadn’t acted like a haven currency for a while, and Trump’s unpredictable policy making and US deficits will weigh on it.

As February trading gets underway, many strategists are sticking to their calls for more pressure on the dollar even as US data have been pointing to a solid economic expansion.

Goldman Sachs Group Inc., Manulife Investment Management and Eurizon SLJ Capital all see a weaker US currency ahead, though any decline is likely to be far from smooth. In fact, swings in currencies and precious metals are now bigger than those in equities despite concerns about AI stock bubbles.

“It is notable that FX volatility has increased by a similar magnitude as it did last April, while rates and equities have not,” Goldman strategists including Kamakshya Trivedi wrote in a note. “The recent injection of policy uncertainty will be sufficiently durable to keep the dollar from making up lost ground.”

Reporting by Ruth Carson, Vassilis Karamanis, and Masaki Kondo