The Dollar Strengthens and Bitcoin Hits All-Time High as Trump Leads in Early US Election Results
The dollar strengthened significantly, and bitcoin reached an all-time high on Wednesday as equity markets rose, with traders betting on a Donald Trump win as early results from the US presidential elections began to emerge.
While surveys have indicated that the presidential contest is extremely close, the Republican candidate seemed to be outperforming his Democratic challenger and Vice President Kamala Harris in initial projections.
Both candidates secured expected victories in traditionally safe states, but signs that the business mogul was gaining an advantage spurred what is known as the Trump Trade.
Indications that Trump’s party was achieving better outcomes in congressional elections enhanced the likelihood of sweeping tax reductions, additional tariffs, and deregulation—factors seen as beneficial for the dollar.
The dollar surged 1.5 per cent to 154.33 yen, marking its highest since July. It also rose over one per cent against the euro and more than two per cent against the Mexican peso.
Bitcoin soared nearly $6,000 to achieve a new record of $75,005.06, surpassing its previous high of $73,797.98 in March.
During the campaign, Trump promised to establish the United States as “the world capital of bitcoin and cryptocurrencies.”
While the key battleground states were too close to call, early counts indicated that Trump was leading in Georgia, and traders closely monitored other incoming results.
Analysts say attention was also focused on the congressional elections, suggesting that a complete victory for Trump and the Republicans would likely elevate the dollar and Treasury yields due to his tax reductions and import tariff plans.
The election comes as the Reserve Bank is set to announce its latest policy decision on Thursday. Expectations are leaning towards a 25-basis-point interest rate cut after a 50-basis-point reduction in September.
The dollar’s rise against the yen pushed Tokyo stocks up by more than two per cent, benefiting exporters. While markets in Shanghai, Sydney, Seoul, Singapore, Wellington, Manila, and Taipei experienced gains, Hong Kong and Jakarta saw declines.
These increases followed a more than one per cent rise in all three major Wall Street indexes.
