The dollar is on track for its largest one-day gain against other major currencies since March 2020, driven by early indications of a Republican victory in key swing states and a notable rise in Trump's popularity. This sudden influx of investment is pushing the dollar index up significantly, while Bitcoin surged to an all-time high amid increased support for cryptocurrencies associated with Trump. Analysts believe that Trump's tariffs and immigration policies are inflationary, which further bolsters the dollar's appeal to investors.
'As Trump nears a victory, the US dollar index has picked up steam,' said James Kniveton, a senior corporate forex dealer at Convera, reflecting how markets are reacting to the possibility of a Republican win. He noted that trade-related currencies are expected to face challenging times as markets brace for increased geopolitical instability and a likely continuation of the tensions in trade relations, particularly with China, under Trump's administration.
'The dollar rallied significantly, jumping 1.63% and hitting 105.04 in the index, with peak points earlier in the day reaching 105.19,' showing a strong resurgence for the US currency as the election results developed. The dollar's climb further underscores the volatility in the market as investors react to election outcomes, with expectations weighing heavily on Trump's historical trade policies that significantly affect foreign trade.
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