By Timothy Samuel
US Election: Stocks fluctuate, bitcoin reaches a record high, and the dollar rises as Trump is predicted to win.As speculators placed bets on Donald Trump winning, with the former president clinching crucial swing states required to win the White House, the dollar jumped and Bitcoin reached a record high on Wednesday. This increased anticipation of new tariffs, tax cuts, and inflation.As the results came in, the Republican candidate seemed to be doing better than his Democratic opponent, Vice President Kamala Harris, despite surveys showing the contest was close.In safe states, both candidates had won as predicted, but signs that the business magnate was gaining ground gave the so-called Trump Trade a boost.Trump won North Carolina and Georgia, but many other swing states were still too close to call. Other states were still indecisive.The potential of broad tax cuts, more tariffs, and deregulation—all of which were viewed as beneficial for the dollar—was further enhanced by the announcement that the former president’s party had taken control of the Senate.The dollar jumped by 1.5 per cent to 154.33 yen, its highest since July. It also rose by more than one per cent against the euro and by more than three per cent against the Mexican peso.Bitcoin reached a record high of $75,330.88, up almost $6,000 from its previous peak of $73,797.98 in March.Trump has promised to designate tech entrepreneur Elon Musk to head a comprehensive audit of government waste and to turn the US into the “Bitcoin and cryptocurrency capital of the world.”Ahead of Tuesday’s US election, Russ Mould, an analyst at AJ Bell, stated that the price of Bitcoin has closely tracked Trump’s standing in the polls and on betting markets.He continued by saying that investors are “possibly taking the view that a Republican victory would lead to a surge in demand for the digital currency.”Because of his intentions to lower taxes and impose import tariffs, analysts predicted that if Trump and the Republicans won a landslide victory in Congress and the White House, the dollar and treasury yields would rise.While the result of the election is being closely watched globally, it is of particular interest in China, after Trump vowed to escalate the trade battle with the economic giant by imposing massive tariffs on Chinese goods.The vote comes as Chinese leaders hold a key meeting to discuss a package of stimulus measures aimed at kick-starting growth and supporting the struggling property sector, which is facing a painful debt crisis.The Senate and House being controlled by Republicans “may bring sweeping spending or tax policy shifts.” But legislative deadlock might stifle volatility, according to SPI Asset Management’s Stephen Innes.”The markets are rushing to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook,” said economist and founder of Esho Capital Peter Esho.Given that Trump’s proposals are regarded as inflationary, such a result could be problematic for Federal Reserve Chair Jerome Powell, who is still fighting to contain inflation.The election coincides with the central bank’s latest policy decision, expected on Thursday, amid speculation it will cut interest rates by 25 basis points, following a 50-point reduction in September.The dollar’s climb against the yen lifted stocks more than three per cent in Tokyo at one point, mainly to gains in exporters, while markets in Shanghai, Sydney, Singapore, Taipei, Mumbai, and Bangkok all rose.But Seoul, Wellington, Manila, and Jakarta suffered losses. Due to worries about how a Trump presidency will affect China’s economy and the relationship between Beijing and Washington, Hong Kong suffered a sharp decrease, plunging about 2% at one point.Wall Street, where all three major indices increased by more than 1%, had given traders a clear lead.Given that Trump’s proposals are regarded as inflationary, such a result could be problematic for Federal Reserve Chair Jerome Powell, who is still fighting
