Dollar Climbs, Bitcoin Breaks Records, and Stock Market Soars After Trump Win

As early election results came in for the US presidential election on Wednesday, traders bet on Donald Trump to win, which caused the dollar to rise and bitcoin to reach a new record high. At the same time, stock markets went up.

Early polls showed the Republican candidate was doing better than his Democratic opponent, Vice President Kamala Harris. However, the race for the White House has been close.

The so-called Trump Trade gained momentum as signs suggested the business magnate was closing the gap in safe states, even though both candidates anticipated winning such states.

As it became clear that the former president’s party was doing better in congressional races, the greenback became more likely to get tax cuts, more tariffs, and less government control.

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The dollar jumped 1.5% to 154.33 yen for the first time since July. It was also up more than 1% against the euro and more than 2% against the Mexican peso.

Bitcoin’s value rose almost $6,000 to a record $75,005.06, higher than the previous high point of $73,797.98, observed in March. He promised during the campaign to make the US “the world capital of bitcoin and cryptocurrencies.”

It was too close to tell who would win the big swing states, but early results showed that Trump was ahead in Georgia. Traders were also keeping a close eye on other results that came in.

Max Gokhman of Franklin Templeton Investment Solutions said, “Georgia starting to glow red may have been the trigger.” He was talking about early exit polls. “If I had to pick one asset as a barometer of Trump sentiment it would be bitcoin.”

Bitcoin would be my choice if I had to pick one product to show how people feel about Trump. Analysts said that people were also paying attention to the races for Congress. They said that if Trump and the Republicans won all of their races, it would likely boost the dollar and Treasury rates because Trump wants to cut taxes and put tariffs on imports.

Control of the Senate and House of Republicans “could bring sweeping spending or tax policy shifts. Still, congressional gridlock could be the ultimate volatility suppressor”, said SPI Asset Management’s Stephen Innes.

This result for the Republicans could cause problems for Federal Reserve Chairman Jerome Powell, who is still trying to control inflation because Trump’s plans are seen as inflationary.

As the election takes place, the central bank is getting ready to make its latest policy decision on Thursday. Most people think it will cut interest rates by 25 basis points, after cutting them by 50 basis points in September.

As the dollar rose against the yen, exporters’ stocks rose more than two percent in Tokyo. Stocks also rose in Shanghai, Sydney, Seoul, Singapore, Wellington, Manila, and Taipei, but they fell in Hong Kong and Jakarta.

All three major Wall Street indices rose by more than 1% prior to the price increases.

The election result is being closely tracked around the world, but in China, it is especially important because Trump has promised to start a trade war with the economic powerhouse by putting huge taxes on goods from China.

The vote takes place at the same time as Chinese authorities are meeting to discuss stimulus measures that will help the country’s massive property industry, which is now experiencing a financial crisis, and accelerate economic growth.

Market Highlights at 0300 GMT