The US dollar has surged dramatically, and Bitcoin has reached a record high, as former President Donald Trump looks poised to make a strong return in the 2024 presidential race. As election results unfold, financial markets are reacting to the possibility of Trump’s policies—including tax cuts, tariffs, and measures aimed at curbing inflation—reshaping the global economy.
According to projections from CBS, Trump’s Republican Party is expected to take control of the US Senate, although votes are still being counted. Meanwhile, market reactions have been swift: the US dollar has soared by around 1.5% against major currencies, including the British pound, euro, and Japanese yen.
In the cryptocurrency space, Bitcoin surged by $6,000 to reach a new all-time high of $75,371.69, surpassing its previous record of $73,797.98 set in March 2024. This sharp increase reflects trader optimism regarding potential economic changes under a second Trump administration, with speculations around tax cuts, trade tariffs, and inflation driving the cryptocurrency’s rally.
Across global stock markets, the mood is similarly volatile. In Asia, Japan’s Nikkei 225 index gained 2.6%, and Australia’s ASX 200 closed up by 0.8%. However, experts caution that financial markets will likely remain turbulent due to uncertainty surrounding Trump’s economic policies.
“Many of his proposed measures will be inflationary and could push bond yields higher, creating further pressure on the Federal Reserve as it seeks to lower interest rates,” said Lindsay James, an investment strategist at Quilter Investors.
Trump’s push to make the US the “bitcoin and cryptocurrency capital of the world” is also contributing to the market’s excitement, as the former president pledges to overhaul regulation to favor digital currencies. Additionally, Trump has expressed plans to appoint Tesla CEO Elon Musk to lead a governmental audit of waste, a move likely to be welcomed by investors.
Trade Tariffs and Foreign Policy Concerns
One of the key concerns surrounding Trump’s potential return is his aggressive stance on global trade. Trump has pledged to dramatically increase tariffs, particularly on Chinese imports, which has caused some unease in Asia, where markets are sensitive to protectionist trade policies.
“Trump’s trade policies are causing anxiety in Asia, given his protectionist approach and the likelihood of higher tariffs on US imports,” noted Katrina Ell, director of economic research at Moody’s Analytics.
The former president’s more isolationist foreign policy approach, particularly regarding Taiwan, has also raised eyebrows. The self-governing island, which is a major producer of computer chips critical to global technology, could be at risk of increased tensions with China under a Trump administration.
Tax Cuts and Business Policies
Trump’s tax-cutting agenda is expected to benefit major US companies, particularly in the tech sector. Many investors see the potential for pro-business policies that could fuel inflationary pressures, limiting the likelihood of further interest rate cuts by the Federal Reserve.
“If Trump gets elected, we expect to see more pro-business policies and tax cuts, which could drive up inflation and reduce the chances of further rate cuts,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.
However, not all global markets have reacted positively to the prospect of a Trump victory. In China, the Shanghai Composite Index ended the day down 0.1%, while Hong Kong’s Hang Seng Index fell by approximately 2.23%.
Key Events to Watch
As the election results continue to unfold, markets will be keeping an eye on several key events. On Thursday, the US Federal Reserve is expected to announce its latest decision on interest rates, with comments from Fed Chair Jerome Powell set to influence global financial sentiment. On Friday, Chinese officials will unveil more details on their plans to tackle the economic slowdown in the world’s second-largest economy, which could further impact global market dynamics.
With a potential Trump return, financial markets face a period of uncertainty and volatility, with investors bracing for the possible economic ripple effects of his policies.