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’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
Handset camera lens maker Largan Precision Co (大立光) on Sunday reported a 6.71 percent year-on-year decline in revenue for the third quarter, despite revenue last month hitting the highest level in 11 months. Third-quarter revenue was NT$17.68 billion (US$581.2 million), compared with NT$18.95 billion a year earlier, the company said in a statement. The figure was in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$17.9 billion, but missed the market consensus estimate of NT$18.97 billion. The third-quarter revenue was a 51.44 percent increase from NT$11.67 billion in the second quarter, as the quarter is usually the peak
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS