Dollar rises as markets bet Trump won US election | Currencies

The dollar is set for its biggest single-day rise against other major currencies since March 2020 and Bitcoin has jumped to an all-time high amid a surge in “Trump trades” as markets increasingly bet on a US election victory for the former president.

Donald Trump declared victory on Wednesday morning after capturing the crucial swing state of Pennsylvania. Republican Trump led Democrat Kamala Harris 267 to 214 electoral votes on Wednesday morning, with 270 electoral votes needed to win the presidency.

The U.S. currency's rise began after very early signs of a Republican victory in Georgia and accelerated throughout the day.

The dollar index – which measures the currency against six major currencies including the euro and yen – rose 1.63% to 105.04 at 0615 GMT, previously at 105.19, a four-month high. This put the company on track for its best day since March 2020.

Trump's tariffs and immigration policies are seen by analysts as inflationary and are boosting the dollar.

Bitcoin rose as much as 8.63% to hit a record high of $75,389. Trump is considered a more active supporter of cryptocurrencies than Harris.

“Although there are still votes to be counted, the U.S. dollar index has gained momentum as Trump moves closer to a victory,” said James Kniveton, a senior corporate foreign exchange trader at Convera.

“Trade-related currencies are likely to feel the brunt of the Trump trade as markets prepare for a more volatile geopolitical environment and a resumption of the trade war with China.”

The U.S. currency rose as much as 3.36% to 20.7720 Mexican pesos, a more than two-year high. In offshore trading, it rose as much as 1.23% to 7.1860 yuan for the first time in nearly three months. Mexico and China are among the countries likely to be hit hardest by Trump's tariffs.

The euro fell as much as 1.92% to $1.0719 for the first time since July 2. Sterling fell as much as 1.35% to $1.2865.

The dollar rose as much as 1.8% to 154.34 yen, its highest since July 30.

Republicans won control of the Senate and made gains in the House while the party struggled to maintain control there, raising the potential for a red sweep.

Analysts at Deutsche Bank wrote in a research note: “A potential unity government under President Trump would have the greatest scope for fiscal policy and would likely be the most optimistic outcome for the dollar.”

“But even without congressional oversight, a Trump victory would be clearly bullish for the dollar due to the impact of tariffs, and the dollar is particularly likely to outperform against high-beta currencies such as the Mexican peso and the Australian dollar, they said.

The Australian dollar fell as much as 1.87% to a three-month low of $0.6513.