The US dollar surged and bitcoin hit a record high yesterday before former US president Donald Trump claimed victory in the US election, with traders ramping up bets on fresh tax cuts, tariffs and rising inflation.
While polls had shown the race on a knife edge, the Republican fared far better than his Democratic opponent, US Vice President Kamala Harris, as results rolled in.
Both candidates picked up expected wins in safe states, but indications that the business tycoon was on course for a second term boosted the so-called “Trump trade.”
Photo: EPA-EFE
News that the former president’s party had won control of the Senate also boosted the prospect of sweeping tax cuts, more tariffs and deregulation — seen as a boost for the greenback.
The US dollar jumped 1.5 percent to ¥154.38, its highest since July, and was also up more than 1 percent against the euro and more than 3 percent against the Mexican peso.
Bitcoin sprung US$6,000 higher to a record US$75,371.69, topping its previous peak of US$73,797.98 in March.
Trump has pledged to make the US the “bitcoin and cryptocurrency capital of the world” and to put tech billionaire Elon Musk in charge of a wide-ranging audit of governmental waste.
Investors are “potentially taking the view that a Republican victory would lead to a surge in demand for the digital currency,” AJ Bell PLC analyst Russ Mould said.
Analysts said a clean sweep of Congress and the White House for Trump and Republicans would likely boost the US dollar and Treasury yields, owing to his plans to cut taxes and impose tariffs on imports.
“The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook,” Esho Capital economist and founder Peter Esho said.
“Trade and tariffs and taxation would be the three Ts of the Trump Trade, followed by deregulation,” said Neil Wilson, chief market analyst at Finalto trading group.
However, he added: “Bear in mind as a caveat that the House is still up for grabs and Trump had complete control of Congress last time and it didn’t mean he could do everything he said he would.”
Such an outcome could provide a headache for US Federal Reserve Chairman Jerome Powell as he continues his battle to bring inflation to heel, with Trump’s plans considered inflationary.
The election comes as the central bank prepares to deliver its latest policy decision Thursday amid expectations it would cut interest rates by 25 basis points, having lowered them by 50 points in September.
The US dollar’s surge against the yen rallied stocks more than 3 percent in Tokyo at one point thanks to gains in exporters, while markets in Sydney, Singapore, Taipei, Mumbai and Bangkok also rose.
However, there were losses in Shanghai, Seoul, Wellington, Manila and Jakarta.
Hong Kong was also well down — at one point diving almost 3 percent — on worries about the impact of a Trump presidency on China’s economy and relations between Beijing and Washington.
London, Paris and Frankfurt all rose at the open.
US stock futures rose sharply hours before the opening of markets yesterday.
Futures — essentially bets on what the price of a stock would be at a later date — were up 2.2 percent for the Dow, 2 percent for the broad-based S&P 500 and 1.7 percent for the tech-heavy Nasdaq.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along