Wednesday, November 6, 2024 - The dollar surged, and bitcoin reached a new record high Wednesday, November 6, as traders increasingly bet on a Donald Trump victory in the U.S. presidential race. Trump picked up wins in critical swing states, ramping up expectations of fresh tax cuts, tariffs, and inflation-driving policies that favor the greenback.
Despite pre-election polls predicting a tight race, Trump appeared to be
outpacing his Democratic rival, Vice President Kamala Harris, as votes were
counted. His wins in key states such as Georgia and North Carolina fueled a
market rally driven by the so-called "Trump Trade."
The dollar gained 1.5% to hit 154.33 yen, the highest level since July,
while it also rose more than 1% against the euro and over 3% against the
Mexican peso. Bitcoin surged nearly $6,000, reaching a record $75,330.88,
surpassing its previous peak of $73,797.98 in March.
Trump's campaign promises to establish the U.S. as the “bitcoin and
cryptocurrency capital of the world” and his intention to appoint tech
billionaire Elon Musk to lead an audit of government waste have spurred
investor enthusiasm in digital currency markets. Analysts noted that bitcoin’s
price has mirrored Trump’s polling numbers, with a Republican victory
potentially fueling further demand for digital assets.
A clean Republican sweep of Congress and the White House is expected to
boost the dollar and Treasury yields, particularly due to Trump’s tax cut and
tariff plans. However, such policies may increase inflation, potentially
complicating efforts by Federal Reserve Chair Jerome Powell, who has been
focused on bringing inflation under control.
In anticipation of election-driven volatility, global markets saw mixed
reactions. Tokyo's Nikkei jumped more than 3% as exporters benefited from the
weaker yen, while Shanghai, Sydney, Singapore, and other Asian markets also
posted gains. Meanwhile, Hong Kong’s Hang Seng Index dropped 2% amid concerns
over U.S.-China trade relations under a potential Trump presidency.
China remains closely attuned to the election's outcome, as a Trump win
could intensify trade tensions, with tariffs potentially affecting its economy.
The election coincides with a critical meeting of Chinese leaders who are
strategizing economic measures to support growth, especially as the country’s
property faces debt crisis
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