The U.S. dollar surged, and Bitcoin hit a new all-time high on Wednesday, as traders grew increasingly confident in a potential victory for Donald Trump in the presidential race. Trump’s wins in two key swing states raised expectations of fresh tax cuts, new tariffs, and rising inflation—all seen as favorable for his economic agenda.
While polls had shown the election too close to call, early returns suggested Trump was performing better than his Democratic rival, Vice President Kamala Harris. Both candidates had secured victories in their respective safe states, but the Trump momentum, especially in battleground areas, fueled what is often referred to as the “Trump Trade.”
While several key swing states remained too close to call, Trump managed to secure wins in Georgia and North Carolina, with others still up in the air. In addition, news that the Republican Party had regained control of the Senate further fueled optimism about the likelihood of tax cuts, deregulation, and more tariffs—policies that typically benefit the U.S. dollar.
The dollar jumped 1.5% to ¥154.33, its highest level since July. It also strengthened by more than 1% against the euro and surged over 3% against the Mexican peso. Meanwhile, Bitcoin soared nearly $6,000 to reach a record high of $75,330.88, surpassing its previous peak of $73,797.98 from March.
Trump has long been a vocal supporter of cryptocurrencies, pledging to make the U.S. the “bitcoin and cryptocurrency capital of the world.” His stance on digital currencies, combined with the market’s perception of a Republican victory, may have driven up demand for Bitcoin. Analysts noted that the price of Bitcoin has closely tracked Trump’s position in the polls, with some investors speculating that a Republican victory could spark a rise in demand for digital assets.
Market analysts believe a potential sweep of both the White House and Congress by Trump and the Republicans could boost the dollar and Treasury yields, particularly due to expectations of tax cuts and tariffs on imports. However, some caution that congressional gridlock could dampen any significant policy shifts. Stephen Innes of SPI Asset Management suggested that, while Republican control could signal major fiscal changes, the potential for gridlock might stabilize markets.
Peter Esho, economist and founder of Esho Capital, noted that markets appeared to be pricing in a higher-growth, higher-inflation scenario, adding that this could pose challenges for Federal Reserve Chairman Jerome Powell as he continues to manage inflation.
The election results also come ahead of a key Federal Reserve meeting, where it is expected that the central bank will cut interest rates by 25 basis points following a 50-point reduction in September.
The dollar’s rally against the yen spurred a surge in Japanese stocks, which jumped more than 3% at one point, benefiting from gains in export-oriented companies. Other Asian markets, including those in Shanghai, Sydney, Singapore, Taipei, Mumbai, and Bangkok, also saw gains. However, markets in Seoul, Wellington, Manila, and Jakarta experienced declines.
Hong Kong’s stock market took a hit, with the Hang Seng Index dropping nearly 2%. The sell-off was driven by concerns about the impact of a Trump presidency on U.S.-China relations and its potential effects on China’s economy. Trump’s vow to impose significant tariffs on Chinese goods had already raised tensions before the election.
For China, the election outcome is particularly important, as the country’s leaders are holding a crucial meeting to discuss a new stimulus package aimed at bolstering economic growth and addressing the severe debt crisis in the country’s real estate sector.
Key Market Figures (as of 0620 GMT):
- Dollar/Yen: Up at ¥153.85 from ¥151.60 (previous day)
- Euro/Dollar: Down at $1.0746 from $1.0930
- Pound/Dollar: Down at $1.2884 from $1.3035
- Euro/Pound: Down at 83.41 pence from 83.82 pence
Global Stock Indexes:
- Tokyo – Nikkei 225: +2.4% at 39,405.19 (close)
- Hong Kong – Hang Seng Index: -2.0% at 20,585.45
- Shanghai – Composite: +0.4% at 3,400.69
- New York – Dow Jones: +1.0% at 42,221.88 (close)
- London – FTSE 100: -0.1% at 8,172.39 (close)
Commodities:
- West Texas Intermediate Crude: -1.8% at $70.73 per barrel
- Brent North Sea Crude: -1.8% at $74.19 per barrel
