The US dollar surged, and Bitcoin soared to an all-time high on Wednesday, as global equity markets rallied in response to early results from the US presidential election showing Donald Trump leading in key battleground states.
Traders reacted positively to the prospect of a Trump victory, which has historically been associated with the “Trump Trade”—a market trend characterized by optimism about policies such as tax cuts, deregulation, and tariffs. Although the race remained tight, early projections indicated that Trump was outpacing his Democratic opponent, Vice President Kamala Harris, in crucial swing states.
While both candidates secured expected wins in safe states, signs that Trump was gaining ground in contested regions gave a boost to market sentiment. Republican successes in Congressional races further raised expectations for policies that could benefit the dollar. In response, the US dollar spiked 1.5% against the yen to 154.33, its highest level since July, and rose more than 1% against the euro and over 2% against the Mexican peso.
Bitcoin also saw a dramatic surge, jumping by nearly $6,000 to hit a new record high of $75,005.06, surpassing its previous peak of $73,797.98 set in March. During his campaign, Trump had vowed to make the US “the world capital of Bitcoin and cryptocurrencies,” further fueling enthusiasm around the digital asset.
While results in key swing states remained too close to call, early data suggested Trump was leading in Georgia, a critical battleground state. Max Gokhman of Franklin Templeton Investment Solutions noted, “Georgia starting to glow red may have been the trigger for the rally.”
Congressional election results also drew attention, with analysts anticipating a Republican clean sweep. Such an outcome could drive further dollar strength and increase Treasury yields, as Trump’s pro-business agenda of tax cuts and tariffs would likely boost investor confidence in the US economy.
Stephen Innes of SPI Asset Management pointed out that if Republicans gain control of both the Senate and the House, it could lead to significant shifts in spending and tax policies. However, he cautioned that political gridlock could result in market volatility.
In Asia, the dollar’s strength against the yen lifted Japan’s Nikkei 225 by more than 2%, with exporter stocks benefitting. Other Asian markets, including those in Shanghai, Sydney, Seoul, Singapore, Wellington, Manila, and Taipei, also saw gains, while Hong Kong and Jakarta experienced declines. On Wall Street, all three major indices climbed more than 1%.
The global attention on the US election was particularly pronounced in China, where leaders are discussing stimulus measures to support the country’s economy and struggling property sector. Trump’s threats to escalate the trade war with China, including the imposition of heavy tariffs on Chinese imports, have heightened concerns about the future of US-China relations and global trade.
