Dollar and Bitcoin Surge as Markets React to Possible Trump Win

The U.S. dollar made its biggest one-day jump against major currencies since March 2020, while Bitcoin hit a new all-time high. These gains came as markets showed more confidence in a possible election victory for former President Donald Trump, with investors preparing for changes in economic policies.

Trump claimed victory early Wednesday after winning the key swing state of Pennsylvania. By then, he had 267 electoral votes compared to Democrat Kamala Harris’s 214, just shy of the 270 needed to win the presidency. The dollar started rising with early signs of Republican wins in Georgia and kept climbing throughout the day.

Trump’s Strong Lead Boosts Dollar

The dollar index, which tracks the U.S. dollar against six major currencies like the euro and yen, rose 1.63% to 105.04, reaching a four-month high. This marked its biggest rise since early 2020. Analysts believe Trump’s trade and immigration policies, which can lead to higher prices, are supporting the dollar’s strength.

Bitcoin also saw a major boost, climbing 8.63% to reach $75,389, a new record. Investors expect Trump to be more supportive of cryptocurrency than Harris, which has added to Bitcoin’s rise.

“Even with votes still being counted, the U.S. dollar index has gained speed as Trump’s chances improve,” said James Kniveton, a foreign exchange expert. Markets are also bracing for possible trade tensions with China, which could drive the dollar up even more.

Bitcoin Hits Record High

The dollar’s strength has affected other currencies globally. It surged 3.36% against the Mexican peso, hitting a two-year high, and rose 1.23% against China’s offshore yuan, a level not seen in nearly three months. Both Mexico and China are expected to feel the impact of Trump’s trade policies if he wins.

Other currencies also took a hit. The euro dropped 1.92% to $1.0719, its lowest since July, while the British pound fell 1.35% to $1.2865. Against the yen, the dollar rose 1.8% to 154.34, the highest since late July.

With Republicans taking control of the Senate and making gains in the House of Representatives, the idea of a “Red Sweep” (or a fully Republican government) has gained momentum.

Deutsche Bank analysts noted that if Trump wins with full control of Congress, it could make the dollar even stronger. However, even if Trump doesn’t gain full control, his policies alone are likely to keep boosting the dollar, especially against currencies like the peso and the Australian dollar, which dropped to $0.6513, a three-month low.

As the election continues to unfold, investors are watching closely, expecting potential changes in policies that could affect the global economy.