By Samuel Indyk and Kevin Buckland

LONDON (Reuters) -The dollar was set for its biggest one-day rise since March 2020 against major peers on Wednesday and bitcoin jumped to an all-time high after Donald Trump was re-elected president, with the Republicans also winning the Senate and making gains in the House.

The U.S. currency’s climb began after very early indications of a Republican win in Georgia and gains have held throughout the European morning.

The – which measures the currency against six major peers – advanced 1.7% to 105.16 as of 1130 GMT, a four-month peak. That put it on course for its best day since March 2020.

Trump’s fiscal, tariff and immigration policies are seen as inflationary by analysts, buoying treasury yields and in turn the dollar.

“It has already been a very strong reaction, a sharp increase in the dollar,” said Niels Christensen, chief analyst at Nordea.

“Expectations of looser fiscal policy and a tight labour market point to higher inflation and higher yields.”

The benchmark 10-year U.S. treasury yield rose 17 basis points to 4.44571%, a four-month high.

The U.S. currency jumped over 3% to 20.8038 Mexican pesos, a more than two-year high. It rose as much as 1.3% to 7.1967 yuan in offshore trading for the first time in almost three months.

The finished the domestic session down 0.8% at 7.1649 per dollar, on track for its biggest daily loss since June 2023.

Mexico and China are among countries that stand to be hardest hit by possible Trump tariffs.

The euro fell as much as 1.9% to $1.0702, its lowest since June 28. Sterling slipped 1.3% to $1.2873.

The dollar rose to 154.38 yen, the highest since July 30. It was last at 153.92.

Japan’s chief cabinet secretary Yoshimasa Hayashi said on Wednesday that the government intended to closely watch moves on the foreign exchange market, including speculative moves, with a higher sense of urgency.

climbed as much as 8.6% to reach a record $75,389. It was last up around 7.5% at $74,361. Trump is seen as more actively supportive of cryptocurrencies than Harris.

Republicans also won control of the Senate, and made gains in the House of Representatives as the party battled to retain control there, raising the potential for a so-called “Red Sweep”.

“The likelihood of a Republican sweep is quite large and that means more expansionary fiscal policy,” said Kirstine Kundby-Nielsen, FX analyst at Danske Bank (CSE:).

“A more expansionary fiscal policy and ‘America first’ approach will support U.S. assets, including the dollar,” Kundby-Nielsen added.

Investing.com – The U.S. dollar soared Wednesday, set for its biggest one-day rise since March 2020, as Donald Trump closed in on presidential victory, while a Republican clean sweep of Congress also looked likely.

At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies,rose 1.4% to 104.737, after earlier climbing as high as 105.237, a four-month peak. 

Dollar soars as Trump nears White House return

Republican candidate Donald Trump declared himself the victor in the US presidential election earlier Wednesday, despite the race yet to be officially called, saying the win gives him a “powerful mandate” to enact his various economic policies.

The Republican party has also won a majority in the Senate, and was also seen on course to also win the House of Representatives.

A Republican sweep in Congress presents a much easier path for Trump to enact major policy changes, with his tariff and immigration policies seen as inflationary by analysts, buoying the dollar.

“Trump trades are in full swing as the counting of US ballots continues,” said analysts at ING, in a note. “If the growing consensus for a Republican clean sweep ends up materialising, we expect a prolonged period of dollar outperformance.”

The also meets this week, concluding its gathering on Thursday. Markets have been positioning for another rate cut, this time by 25 basis points instead of the jumbo 50-basis point reduction seen in September.

Euro slumps 

In Europe, slumped 1.5% to 1.0762, falling to its lowest level since early July as a second term for Donald Trump as US president becomes more likely.

“The euro has so far proved the weakest of the G10 currencies overnight and you can see why,” ING added. “The expectation is that Donald Trump extends his trade war from just China in his first term more broadly in his second term. This at a time of stagnant eurozone growth and self-reflection – especially in Germany – as to its future business model. Plans to export its way out of stagnation are no longer an option for the eurozone.”

This euro weakness comes despite Germany’s services sector seeing a slight uptick in business activity in October, reaching a three-month high, earlier Wednesday.

The rose to 51.6 from 50.6 in September, marking the first acceleration in growth in five months. 

fell 1% to 1.2917, with the likely to authorise another rate cut of 25 basis points on Thursday, its second cut following its first reduction in the cost of borrowing in four years in August.

Before last week’s budget a cut was seen as a near certainty, but the bigger than expected scale of Government spending and borrowing revealed has created some uncertainty.

Asian currencies face Trump woes

soared 1.6% to 153.95, to an over three-month high, as the Trump victory drew nearer. 

Weakness in the yen also kept traders on edge over potential currency market intervention by the government, following recent verbal threats from ministers.

climbed 0.8% to 7.1579, with the yuan retreating as Trump has vowed to impose steep tariffs against China if reelected, presenting a tougher outlook for the yuan.

Focus this week is also on a meeting of China’s National People’s Congress, where the government is widely expected to approve more fiscal spending for the coming years. 

fell 0.9% to 0.6579, with the Australian economy seen suffering as a consequence of Trump’s potential tariffs on China, given Australia’s trade links with the Asian giant.

Investing.com – The U.S. dollar slipped slightly Tuesday, limping into what is likely to be a very close presidential election, the result of which could drive significant foreign exchange moves.

At 04:10 ET (09:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.1% to 103.655, after overnight falling to the lowest since Oct. 21, compared with the highest levels since the end of July last week.

Dollar retreats as US election arrives

The greenback has been hit, in part, by an unwinding “Trump trade,” as recent polls showed Donald Trump and Kamala Harris set for a tight presidential race, with the majority of voting starting later Tuesday. 

In recent weeks, financial markets had leaned towards a win for Trump, whose tariff and immigration policies are considered inflationary by analysts, leading to gains for US yields and the dollar.

“With an exceptionally close US election upon us, plus the outcome likely to deliver a binary impact on currency markets, the FX options market is trading at a respectful level of volatility,” said analysts at ING, in a note.

“Given the run-up in the dollar in October, we think we need to see a Red Sweep for the dollar to push on much further. A Harris win would seem a benign outcome and prove a dollar negative.”

The also meets later this week, and markets have been positioning for another rate cut, this time by 25 basis points instead of the jumbo 50-basis point reduction seen in September.

Traders will be watching for any more cues from Fed Chair Jerome Powell on the bank’s plans to cut rates further, especially as recent data showed stickiness in U.S. inflation and resilience in the economy. 

But the labor market was also seen deteriorating, which could keep the Fed biased towards more easing.

Euro linked to US result

In Europe, traded 0.2% higher at 1.0893, after climbing to 1.0914 in the previous session for the first time since Oct. 15, with the euro benefiting from the dollar weakness.

Despite these gains, the euro is having to cope with regional economic weakness, with falling 0.9% on the month in September, as well as the political uncertainty surrounding the US election.

“For this week, expect the fall-out from US elections to dominate,” ING added. “Ultimately, a Trump win without the House could be the worst scenario for EUR/USD by late 2025, where global growth would be finding no insulation from US tax cuts and the ECB might be forced to cut rates deeper into accommodative territory.”

rose 0.2% to 1.2980, with the set to authorise another rate cut of 25 basis points on Thursday.

Aussie dollar gains after RBA meeting

rose slightly to 152.16, with the Japanese yen remaining close to its weakest level in three months, while climbed 0.1% to 7.1077, with focus turning to a meeting of the Standing Committee of the NPC that is expected to yield more cues on China’s plans for fiscal stimulus.

rose 0.5% to 0.6618, after the held policy steady on Tuesday, as widely expected.

RBA Governor Michele Bullock, however, took a more hawkish stance in her news conference, saying she still believed there are upside risks for inflation.

“The Australian dollar could be the big winner should Harris keep Trump out of the White House. Under such a scenario, the China tariff threat would be reduced considerably,” ING said.