The US dollar surged and Bitcoin reached a record high on Wednesday as traders reacted to early results from the 2024 US presidential election, which showed former President Donald Trump outperforming his Democratic rival, Vice President Kamala Harris.
While the race remains tight with key swing states too close to call, early projections suggested Trump was gaining an edge, particularly in Georgia. This fueled optimism for the so-called “Trump Trade,” which includes expectations of tax cuts, more tariffs, and deregulation, all seen as beneficial for the US economy.
The dollar jumped 1.5% against the yen, reaching a level of 154.33 yen — its highest point since July. It also rose more than 1% against the euro and over 2% against the Mexican peso. The surge in the dollar was bolstered by speculation that a Republican victory could lead to policies that would strengthen the greenback, including potential tax reforms and trade policies.
Bitcoin, in particular, saw a major boost, climbing nearly $6,000 to a record $75,005.06, surpassing its previous high of $73,797.98 set in March. Trump’s campaign promises to make the US “the world capital of bitcoin and cryptocurrencies” appeared to resonate with traders, making Bitcoin a key barometer of market sentiment around Trump’s potential win.
Early indicators in Congressional races also suggested a strong performance from Republican candidates, which could lead to a unified Republican government and further increase expectations of fiscal stimulus measures, such as tax cuts. This is seen as a positive for the US dollar and Treasury yields.
Equity markets were also buoyed by the dollar’s rally. Stocks in Tokyo surged over 2% thanks to gains in exporters, and other Asian markets, including Shanghai, Sydney, Seoul, and Singapore, followed suit. However, Hong Kong and Jakarta experienced losses.
On Wall Street, the main indexes all climbed more than 1%, reflecting investor optimism over the early election results. Meanwhile, in China, Trump’s lead drew heightened attention due to his previous threats of escalating trade tensions with Beijing through hefty tariffs.
As the Federal Reserve prepares to make its policy decision on Thursday, the election outcome adds further uncertainty. Analysts believe a Republican victory and its potential inflationary policies could complicate the central bank’s efforts to curb inflation, particularly if tax cuts and tariffs are implemented.
