Dollar, Bitcoin soar as Trump wins presidency

Mr Donald Trump’s almost certain victory in the US presidential election has sent the dollar soaring towards its biggest one-day rise.

Bitcoin has also hit a record high while traders bet on potential tax cuts, increased tariffs, and rising inflation under Trump’s second term.

This election result will have a major impact on the global economy.

The Republican Party is also set to take control of the Senate, although there are still votes left to count.

Republican Trump claimed victory in the 2024 presidential contest after Fox News projected he had defeated Democrat Kamala Harris.

Other news outlets had yet to call the race for Trump, but he appeared on the verge of winning after capturing the battleground states of Pennsylvania, North Carolina and Georgia and holding leads in the other four, according to Edison Research.

Meanwhile, the dollar has soared by about 1.5% against a host of different currencies, including the pound, euro and the Japanese yen, BBC reported.

In Japan, the benchmark Nikkei 225 stock index ended the session up by 2.6%, while Australia’s ASX 200 closed 0.8% higher.

The major US stock indexes also look likely to open sharply higher. That came after the Dow Jones Industrial Average, S&P 500 and Nasdaq all closed more than 1% higher on Tuesday.

Trump has pledged to make the US the “bitcoin and cryptocurrency capital of the world”.

The value of Bitcoin has also jumped by $6,000 (£4,645) to a record high of $75,371.69, surpassing the previous high of $73,797.98 seen in March this year.

Trump has previously said he plans to put billionaire Elon Musk in charge of an audit of governmental waste.

Mr Musk has long been a proponent of cryptocurrencies and his company Tesla famously invested $1.5bn in Bitcoin in 2021, although the price of the digital currency can be very volatile.

Tesla’s Frankfurt-listed shares rallied over 14% at the open on Wednesday. Mr Musk, Tesla’s top shareholder, has supported Trump throughout his electoral campaign.

Experts are, however, predicting a turbulent day elsewhere on financial markets as a response to global uncertainty and Trump’s potential plans for the economy.

“Many of his measures will be inflationary and likely to lead to a rise in bond yields, putting pressure on the Federal Reserve in its quest to bring interest rates down,” said Lindsay James, investment strategist at Quilter Investors.

Donald Trump previously said he would dramatically increase trade tariffs, especially on China, if he became the next US president.

“Trump’s global trade policies are causing particular angst in Asia, given the strong protectionist platform on which more aggressive tariffs on imports into the US have been pledged,” said Katrina Ell, director of economic research at Moody’s Analytics.

Trump’s more isolationist stance on foreign policy has also raised questions about his willingness to defend Taiwan against potential aggression from China.

The self-ruling island is a major producer of computer chips, which are crucial to the technology that drives the global economy.

In mainland China, the Shanghai Composite Index ended the day down 0.1%, while Hong Kong’s Hang Seng was down by around 2.23%.

Trump’s tax-cutting agenda has been broadly welcomed by large corporates in the US.

“We should see pro-business policies and tax cuts, in turn possibly driving up inflation and less rate cuts,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.

Investors also have other key issues to focus on this week.

On Thursday, the US Federal Reserve is due to announce its latest decision on interest rates.

Comments from the head of the central bank, Jerome Powell, will be watched closely around the world.

On Friday, top Chinese officials are expected to unveil more details about Beijing’s plans to tackle the slowdown of the world’s second largest economy.

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