Dollar Soars to 2020 Highs Amidst US Election Frenzy
US presidential election 2024: The USD recorded its strongest increase since March 2020, after the 2024 US presidential election officially took place and had initial results in some states.
Currently, the US Dollar Index (DXY) measuring greenback fluctuations with 6 major currencies (EUR, JPY, GBP, CAD, SEK, CHF) has increased by 1.45%, reaching 104.88. This index at times increased beyond the 105 mark, reaching 105.18.
Accordingly, Mr. Donald Trump is winning 248 electoral votes. Ms. Kamala Harris received 205 votes. The first two battleground states, North Carolina and Georgia, leaned towards the former US President. This is one of 7 battleground states that play a decisive role in the final outcome of this year’s US presidential election campaign.
Bloomberg assessed that the initial results of the US presidential election showed that Donald Trump prevailed in a number of important states, while triggering a sudden increase in hesitant US Treasury bond yields. predict that Mr. Trump’s policies will help maintain US interest rates at high levels.
Rising bond yields promise to attract cash flows into the US as investors seek higher returns. The greenback rose sharply against all other major currencies during the Asian session.
The tight race has increased volatility in the markets, as hedge funds and other traders have poured into “Trump” trades. However, important battleground states such as Michigan, Wisconsin and Pennsylvania are still in fierce competition and the results have not yet been determined. This leaves open the possibility of a sharp reversal in currency markets, as has been seen in previous cycles.
As of October 29, hedge funds and speculative traders were betting on a further increase in the value of the USD, also fueled by demand for safe-haven assets ahead of the general election results. American President. However, with vote counting still underway in the early stages nationwide; Therefore, it may take many hours or even days before final results are available.
The former US President’s tariff and immigration policies are predicted by analysts to have been driving the dollar up. Accordingly, former US President Trump proposed a general tax rate of 10-20% on all imported products. For products from China, he wants to impose a tax rate of 60-100%. He also announced that he would impose a 200% tax on cars imported from Mexico. While Ms. Harris still wants to maintain the current import tariff policy for each industry group from 10-25%.
“The dollar has regained its losses recently as Donald Trump racked up some early wins,” said James Kniveton, a senior corporate foreign exchange trader at Convera.
In contrast, the AUD fell 1.4%, to 0.65445 USD, while the EUR fell 1.54%, to 1.0760 USD. The USD increased 1.64%, reaching 154.035 yen. The greenback rose 2.9%, reaching 20.6767 Mexican pesos. This currency also increased 0.93%, reaching 7.1644 yuan. Mexico and China are among the countries hardest hit by Trump’s tariffs.
Meanwhile, bitcoin increased by 8.54%, reaching a record level of 75,060 USD. Currently, Mr. Trump is said to be a more active supporter of cryptocurrency than Ms. Harris.
Mr. Trump’s proposals also tend to push the dollar higher, while potentially limiting the extent to which the US Federal Reserve (Fed) can cut interest rates.
“With the initial results released, it is not surprising that Treasury yields increased, the dollar strengthened, bitcoin also increased,” Reuters quoted Brian Jacobsen, chief economist at Annex. Wealth Management.