Dollar soars, bitcoin hits record, stocks swing on expected Trump win

The dollar surged and Bitcoin hit a record high on Wednesday as traders bet on a victory for Donald Trump, with the ex-president securing key swing states necessary to take the White House. This boosted expectations for fresh tax cuts, tariffs, and rising inflation.

While polls had shown the race on a knife-edge, the Republican candidate appeared to be faring better than his Democratic opponent, Vice President Kamala Harris, as results rolled in.

Both candidates had secured expected wins in safe states, but indications that the business tycoon was edging ahead boosted the so-called Trump Trade.

Although many key swing states were still too close to call, Trump won Georgia and North Carolina, with others still undecided.

News that the former president’s party had taken control of the Senate further boosted prospects for sweeping tax cuts, additional tariffs, and deregulation—seen as favourable for the greenback.

The dollar jumped by 1.5 per cent to 154.33 yen, its highest since July. It also rose by more than one per cent against the euro and by more than three per cent against the Mexican peso.

Bitcoin surged nearly $6,000, hitting a record $75,330.88, surpassing its previous peak of $73,797.98 in March.

Trump has pledged to make the United States the “Bitcoin and cryptocurrency capital of the world” and to appoint tech billionaire Elon Musk to lead a wide-ranging audit of governmental waste.

“The price of Bitcoin has closely followed Trump’s position in the polls and on betting markets,” said analyst Russ Mould from AJ Bell ahead of Tuesday’s US election.

Investors are “potentially taking the view that a Republican victory would lead to a surge in demand for the digital currency,” he added.

Analysts stated that a clean sweep of Congress and the White House by Trump and the Republicans would likely boost the dollar and treasury yields, due to his plans to cut taxes and impose tariffs on imports.

Republican control of the Senate and House “could bring sweeping spending or tax policy shifts. However, congressional gridlock could suppress volatility,” said Stephen Innes of SPI Asset Management.

Economist and Esho Capital founder Peter Esho noted, “The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook.”

Such an outcome could pose a headache for Federal Reserve chair Jerome Powell, who is still battling to bring inflation under control, with Trump’s plans considered inflationary.

The election coincides with the central bank’s latest policy decision, expected on Thursday, amid speculation it will cut interest rates by 25 basis points, following a 50-point reduction in September.

The dollar’s surge against the yen lifted stocks more than three per cent in Tokyo at one point, thanks to gains in exporters, while markets in Shanghai, Sydney, Singapore, Taipei, Mumbai, and Bangkok also rose.

However, there were losses in Seoul, Wellington, Manila, and Jakarta.
Hong Kong saw a steep decline, diving nearly two per cent at one point, due to concerns about the impact of a Trump presidency on China’s economy and the relations between Beijing and Washington.

Traders had received a strong lead from Wall Street, where all three main indices climbed by more than one per cent.

While the result of the election is being closely watched globally, it is of particular interest in China, after Trump vowed to escalate the trade battle with the economic giant by imposing massive tariffs on Chinese goods.

The vote comes as Chinese leaders hold a key meeting to discuss a package of stimulus measures aimed at kick-starting growth and supporting the struggling property sector, which is facing a painful debt crisis.

– Key figures around 0620 GMT –

Dollar/yen: UP at 153.85 yen from 151.60 yen on Tuesday

Euro/dollar: DOWN at $1.0746 from $1.0930

Pound/dollar: DOWN at $1.2884 from $1.3035

Euro/pound: DOWN at 83.41 from 83.82 pence

Tokyo – Nikkei 225: UP 2.4 per cent at 39,405.19 (close)

Hong Kong – Hang Seng Index: DOWN 2.0 per cent at 20,585.45

Shanghai – Composite: UP 0.4 per cent at 3,400.69

West Texas Intermediate: DOWN 1.8 per cent at $70.73 per barrel

Brent North Sea Crude: DOWN 1.8 per cent at $74.19 per barrel

New York – Dow: UP 1.0 per cent at 42,221.88 (close)

London – FTSE 100: DOWN 0.1 per cent at 8,172.39 (close)