Dollar and Bitcoin rise after Trump wins presidential election

The US dollar has risen as Donald Trump is now predicted to become president and return to the White House.

Bitcoin also hit a record high as traders bet on potential tax cuts, higher tariffs and rising inflation during a second Trump term.

The election results will have a major impact on the global economy.

The GOP is also set to take control of the Senate, although votes remain to be counted.

The dollar was up about 1.4% against a variety of currencies, including the pound, euro and Japanese yen.

In Japan, the benchmark Nikkei 225 stock index ended the session up 2.6%, while Australia’s ASX 200 closed up 0.8%.

Major US stock indexes are also likely to open sharply higher. This comes after the Dow Jones Industrial Average, S&P 500 and Nasdaq closed up more than 1% on Tuesday.

Why is Bitcoin rising?

Bitcoin’s value also jumped $6,000 (£4,645) to an all-time high of $75,371.69, surpassing the previous high of $73,797.98 seen in March this year.

Trump previously promised to make the US the “bitcoin and cryptocurrency capital of the world.”

His approach stands in stark contrast to that of the Biden administration, which has waged a sweeping crackdown on cryptocurrency companies in recent years.

Trump has proposed firing Gary Gensler, the chairman of the Securities and Exchange Commission, which has sparked online backlash from digital currency supporters.

That comes as Mr. Gensler’s agency introduced new environmental disclosure rules that had been suspended, as well as lawsuits against cryptocurrency companies.

Trump also said he plans to put billionaire Elon Musk in charge of auditing government waste.

Mr Musk has long been a supporter of cryptocurrencies and his company Tesla, as is known. invested $1.5 billion in Bitcoin in 2021although the price of digital currency can be very volatile.

Tesla shares, listed on the Frankfurt stock exchange, rose more than 14% at the open on Wednesday. Mr Musk, Tesla’s top shareholder, supported Mr Trump throughout his campaign.

However, experts predicted a turbulent day in financial markets in response to global uncertainty and Trump’s potential plans for the economy.

U.S. bond yields, the yield the government promises to pay to buyers of its debt, also rose sharply on Wednesday.

A bond is essentially an IOU they can be traded on financial markets, and governments often sell bonds to investors when they want to borrow money.

Analysts speculate that this could be because traders expect some of Trump’s economic measures could lead to higher prices.

Donald Trump, for example, has said he would dramatically increase trade tariffs, especially on China, if he becomes the next US president.

Impact of tariffs

Some economists have warned Trump’s trade proposals would be a “shock” to the UK economy.

Ahmet Kaya, chief economist at the National Institute of Economic and Social Research (Niesr), said the country could become “one of the countries most affected” by such plans.

Experts estimate UK economic growth will slow to 0.4% in 2025, down from a forecast of 1.2%.

Katrina Ell, director of economic research at Moody’s Analytics, said: “Trump’s global trade policies are particularly troubling in Asia, given the strong protectionist platform on which more aggressive tariffs on US imports were promised.”

Trump’s more isolationist stance on foreign policy has also raised questions about his willingness to defend Taiwan from potential aggression from China.

The self-governing island is a major producer of computer chips that are critical to the technologies that drive the global economy.

In mainland China, the Shanghai Composite Index ended the day down 0.1%, while Hong Kong’s Hang Seng was down about 2.23%.

Trump’s tax cut program has been widely welcomed by large corporations in the US.

“We should see pro-business policies and tax cuts, which in turn will probably lead to higher inflation and fewer rate cuts,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.

Investors also have other key issues to focus on this week.

The US Federal Reserve is due to announce its latest interest rate decision on Thursday.

Central bank governor Jerome Powell’s comments will be closely watched around the world.

Top Chinese officials are expected to provide more details on Friday about Beijing’s plans to address the slowdown in the world’s second-largest economy.