The dollar was set for its biggest one-day rise since March 2023 against major peers on Wednesday and bitcoin jumped to an all-time high, with traders increasingly confident of a U.S. election victory for former president Donald Trump.
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.
The U.S. currency’s climb began after very early indications of a Republican win in Georgia.
The dollar index – which measures the currency against six major peers – advanced 1.4% to 104.85 as of 0900 GMT, having earlier hit 105.31, a four-month peak. That put it on course for its best day since March 2023.
Trump’s fiscal, tariff and immigration policies are seen as inflationary by analysts, buoying treasury yields and in turn the dollar.
“It has already been a very strong reaction, a sharp increase in the dollar,” said Niels Christensen, chief analyst at Nordea.
“Expectations of looser fiscal policy and a tight labour market point to higher inflation and higher yields.”
The benchmark 10-year U.S. treasury yield rose 12 basis points to 4.4039%.
The U.S. currency jumped over 3% to 20.8038 Mexican pesos , a more than two-year high. It rose as much as 1.3% to 7.1928 yuan in offshore trading for the first time in almost three months.
The onshore yuan finished the domestic session down 0.8% at 7.1649 per dollar, on track for its biggest daily loss since June 2023.
Source:Reuters