US stocks, Bitcoin hit record highs and dollar rises on Trump’s win

US stocks hit record highs on Wall Street and the dollar posted its biggest gain in eight years as Donald Trump was re-elected to the White House in a historic win.

Bitcoin also took a hit, following Trump’s election promise to make the US “the bitcoin and cryptocurrency capital of the world”.

Investors, however, are betting that Trump’s plan to cut taxes and raise prices will increase inflation and slow the pace of interest rate cuts.

Higher rates for long-term investors will get a better return on their savings and investment dollars.

Markets and currencies around the world have changed dramatically following the news of the US election:

• The dollar rose about 1.75% against a range of currencies, including the pound, the euro and the Japanese yen.
• Major US stock indexes rose as trading opened, with banks outperforming
• The pound fell 1.41% against the US dollar to its lowest level since August
• The FTSE 100 index, which includes the UK’s biggest listed companies, was up 0.1% on Wednesday afternoon.
• The euro fell 2.24% against the US dollar to its lowest level since June
• In Japan, the benchmark Nikkei 225 stock index ended the session up 2.6%, while Australia’s ASX 200 closed 0.8% higher.
• In mainland China, the Shanghai Composite Index ended 0.1% lower, while Hong Kong’s Hang Seng fell about 2.23%.

The value of Bitcoin jumped by $6,000 (£4,645) to a record high of $75,371.69.

Trump’s position on crypto is very different than that of the Biden administration, which has led to a major crackdown on crypto firms.

During the election campaign, Trump had suggested that he would fire Gary Gensler, the chairman of the US regulator of the Securities and Exchange Commission, who has taken legal action against several crypto firms.

Trump also said he plans to put billionaire Elon Musk in charge of the government’s anti-trafficking probe.

Mr Musk has long been a supporter of cryptocurrencies and his famous company Tesla invested $1.5bn in Bitcoin by 2021although the price of a digital currency can fluctuate greatly.

Tesla’s Frankfurt-listed shares rose more than 14% in the open on Wednesday. Mr Musk, Tesla’s top shareholder, supported Trump during his election campaign.

Experts predicted a turbulent day elsewhere in the financial markets, however, in response to global uncertainty and Trump’s potential plans for the economy.

U.S. bond yields, the return the government promises to pay buyers of its debt, rose on Wednesday.

An obligation is an obligation it’s actually an IOU that can be sold in the financial markets and governments often sell bonds to investors when they want to borrow money.

The moves could suggest that investors think that borrowing will increase under the new administration and that they are looking for a higher return on their money.

Some economists also warned that Trump’s proposals on trade would come as a “shock” to countries around the world, including the eurozone and the UK economy.

Donald Trump has said that he will significantly increase trade tariffs, especially on China, if he becomes the next American president.

Ahmet Kaya, chief economist of the National Institute of Economic and Social Research (Niesr), also said that the UK could be “one of the most affected countries” under such plans.

It estimates that economic growth in the UK will slow to 0.4% in 2025, down from a forecast of 1.2%.

Katrina Ell, director of economic research at Moody’s Analytics said: “Trump’s global trade policies are causing a lot of anger in Asia, given the strong protectionist platform where strong US imports have been promised.”

Trump’s increasingly detached stance on foreign policy has also raised questions about his willingness to protect Taiwan from aggression from China.

The self-governing island is a major producer of computer chips, which are vital to the technology that drives the global economy.

Investors also have other important issues to focus on this week.

On Thursday, the US Federal Reserve will announce its latest decision on interest rates.

The comments of the head of the central bank, Jerome Powell, will be closely watched around the world.

North American journalist Anthony Zurcher makes sense of the race for the White House in his biweekly newsletter US Election Unspun. UK students can register here. Those outside the UK can register here.