Dollar Surges, Bitcoin Hits New High Amid Tight U.S. Election

As initial results in the tightly contested U.S. presidential election rolled in, the dollar rallied and bitcoin reached a record high. Trump holds an early lead in Georgia, impacting currencies globally. Analysts suggest Trump's policies may be inflationary, benefiting dollar strength and cryptocurrency support.

The dollar experienced a significant rally on Wednesday, while bitcoin soared to an unprecedented high as investors reacted to initial election results in the fiercely contested U.S. presidential race. Republican Donald Trump is currently leading Democrat Kamala Harris in Georgia, a critical battleground state, as observed by Edison Research.

Despite the early voting returns, a final result may not be available for several hours or potentially days. The dollar index, evaluating the currency against six significant peers like the euro and yen, increased by 1.42% to reach 104.84 as of 0311 GMT.

According to analysts, Trump's trade and immigration policies are perceived as inflationary, aiding the dollar's rise. Bitcoin surged by as much as 8.54% to achieve a record-breaking $75,060, reflecting Trump's perceived support for cryptocurrencies over Harris.

James Kniveton, senior corporate forex dealer at Convera, noted that "the market is reacting to Trump's strong initial showing in Georgia, though final outcomes remain uncertain until more results arrive from urban areas." He also highlighted the pullback in "risk currencies such as the AUD, which had appreciated in anticipation of a tighter race, as Trump gains early victories."

The Australian dollar fell by 1.4% to $0.65445, while the euro declined by 1.54% to $1.0760. Meanwhile, the dollar rose by 1.64% against the yen, reaching 154.035. In the broader context, the U.S. currency surged by 2.9% against the Mexican peso and increased by 0.93% in offshore trading against the Chinese yuan.

(With inputs from agencies.)