Dollar Surges as 'Trump Trades' Lead Market Rally

The U.S. dollar experienced its largest one-day rise since March 2020 amidst ongoing election momentum for Donald Trump. Markets also saw bitcoin reaching new highs. Analysts anticipate Trump's policies could energize inflation, causing fluctuations in trade-related currencies. Meanwhile, Republicans made significant gains in Congress.

The U.S. dollar surged on Wednesday, marking its biggest one-day rise since March 2020, as investors reacted to rising prospects of another Donald Trump presidential victory. Projected wins in key battleground states pushed Republican Trump ahead of Democrat Kamala Harris with 247 electoral votes to her 210.

Crucial states like Pennsylvania remain undecided, yet early Republican success in Georgia sparked significant gains for the dollar. Measuring against major peers, the dollar index climbed 1.63% to 105.04, soaring at one point to a four-month high of 105.19. Analysts interpret Trump's tariff and immigration stances as likely inflationary, thus buoying the U.S. currency.

Bitcoin also reached an all-time high, soaring 8.63% to $75,120, as markets considered Trump more supportive of digital currencies compared to Harris. Additionally, Republicans' control over the Senate increased speculation about a potential 'Red Sweep,' which Deutsche Bank analysts say could allow Trump more freedom to influence fiscal policy, further strengthening the dollar.

(With inputs from agencies.)