WEB DESK: The US dollar surged, and Bitcoin reached a new all-time high on Wednesday, while global equity markets rallied as early results from the US presidential election showed Donald Trump leading in key races.
Traders reacted to the prospect of a Trump victory, which has historically been associated with the so-called “Trump Trade.”
Although polls indicated a tight contest for the White House, early projections suggested Trump was performing better than his Democratic opponent, Vice President Kamala Harris. Both candidates secured expected victories in safe states, but signs that Trump was gaining ground boosted market confidence.
Republican successes in Congressional races further raised the possibility of policies favouring tax cuts, tariffs, and deregulation—moves seen as beneficial for the dollar. The US dollar jumped 1.5 per cent to 154.33 yen, its highest since July, and rose over 1 per cent against the euro and more than 2 per cent against the Mexican peso.
Bitcoin also surged, increasing by nearly $6,000 to a record high of $75,005.06, surpassing its previous peak of $73,797.98 set in March. Trump had promised to turn the US into “the world capital of Bitcoin and cryptocurrencies” during his campaign.
While the results in crucial swing states remained too close to call, early numbers indicated Trump was ahead in Georgia, a key battleground state. Max Gokhman of Franklin Templeton Investment Solutions noted, “Georgia starting to glow red may have been the trigger.”
Analysts highlighted that Congressional results were also drawing attention, with a Republican clean sweep expected to further boost the dollar and Treasury yields due to Trump’s tax-cutting and tariff-raising policies.
Stephen Innes of SPI Asset Management remarked that control of the Senate and House by Republicans could lead to significant shifts in spending and tax policy, though he warned that gridlock in Congress could suppress volatility.
In Asia, the dollar’s strength against the yen lifted Tokyo’s Nikkei 225 by more than 2 per cent, with exporter stocks benefitting. Other Asian markets, including Shanghai, Sydney, Seoul, Singapore, Wellington, Manila, and Taipei, also rose, while Hong Kong and Jakarta saw declines. On Wall Street, all three main indexes climbed more than 1 per cent.
The global interest in the US election is particularly high in China, where leaders are currently discussing stimulus measures to support the country’s economy and struggling property sector. Trump’s threat to escalate the trade war with China by imposing hefty tariffs on Chinese imports has heightened concerns.
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