Getty ImagesUS splits hit record highs on Wall Street and the dollar posted its hugegest obtain in eight years as Donald Trump was re-elected to the White Hoemploy in a historic thrive.
Bitcoin has also hit an all-time high, follothriveg Trump’s election promise to produce the US the “bitcoin and cryptocurrency capital of the world”.
Investors are, however, betting that Trump’s schedule to cut taxes and lift tariffs will push up inflation and reduce the pace of interest rate cuts.
Higher rates for lengthyer nasty spendors will get better returns on savings and spendments they helderly in dollars.
Markets and currencies around the world have shifted keenly follothriveg the US election recents:
- The dollar is up by about 1.75% aobtainst a present of contrastent currencies, including the pound, euro and the Japanese yen
- The convey inant US stock indexes soared as trading uncovered, with prohibitks carry outing particularly well
- The pound sank 1.41% aobtainst the US dollar to its lowest level since August
- The FTSE 100 index, comprising the hugest companies cataloged in the UK, was up 0.1% on Wednesday afternoon
- The euro dived 2.24% aobtainst the US dollar to its lowest level since June
- In Japan, the benchlabel Nikkei 225 stock index finished the session up by 2.6%, while Australia’s ASX 200 seald 0.8% higher
- In mainland China, the Shanghai Composite Index finished 0.1% drop, while Hong Kong’s Hang Seng was down by around 2.23%
Why is Bitcoin going up?
The cherish of Bitcoin jumped by $6,000 (£4,645) to an all-time high of $75,371.69.
Trump’s stance on crypto stands in stark contrast with that of the Biden administration, which has led a sweeping crackdown on crypto firms.
During the election campaign, Trump had proposeed that he could fire Gary Gensler, the chair of US regulator the Securities and Exchange Coshiftrlookion, who has getn lterrible action aobtainst disjoinal crypto firms.
Trump also shelp he schedules to put billionaire Elon Musk in indict of an audit of regulatemental misemploy.
Mr Musk has lengthy been a proponent of cryptocurrencies and his company Tesla well-understandnly spended $1.5bn in Bitcoin in 2021, although the price of the digital currency can be very volatile.
Tesla’s Frankfurt-cataloged splits rallied over 14% at the uncover on Wednesday. Mr Musk, Tesla’s top splithelderlyer, has helped Trump thcdisesteemfulout his electoral campaign.
Experts foreseeed a turbulent day elsewhere on financial labelets, however, as a response to global uncertainty and Trump’s potential schedules for the economy.
US bond produces, the return a regulatement promises to pay buyers of its debts, soared on Wednesday.
A bond is essentipartner an IOU that can be traded in the financial labelets and regulatements normally sell bonds to spendors when they want to borrow money.
The shifts may propose that spendors leank borrothriveg will ascfinish under the recent administration and are needing a higher return for their money.
Tariff impact
Some economists have also alerted that Trump’s proposals around trade would come as a “shock” to countries around the world, including the eurozone and the UK economy.
Donald Trump has shelp he would theatricalpartner incrrelieve trade tariffs, especipartner on China, if he became the next US pdwellnt.
Ahmet Kaya, principal economist for the National Institute of Economic and Social Research (Niesr), also shelp the UK could be “one of the countries most shapeed” under such schedules.
It approximates that economic growth in the UK would catalogless to 0.4% in 2025, down from a foresee of 1.2%.
Katrina Ell, honestor of economic research at Moody’s Analytics shelp: “Trump’s global trade policies are causing particular angst in Asia, given the strong protectionist platcreate on which more aggressive tariffs on convey ins into the US have been pledged.”
Trump’s more isolationist stance on foreign policy has also liftd asks about his willingness to deffinish Taiwan aobtainst potential aggression from China.
The self-ruling island is a convey inant producer of computer chips, which are convey inant to the technology that drives the global economy.
Investors also have other key publishs to center on this week.
On Thursday, the US Federal Reserve is due to proclaim its postponeedst decision on interest rates.
Comments from the head of the central prohibitk, Jerome Powell, will be watched seally around the world.
North America correactent Anthony Zurcher produces sense of the race for the White Hoemploy in his twice-weekly US Election Unspun recentsletter. Readers in the UK can sign up here. Those outside the UK can sign up here.
