The dollar is soaring and recording its strongest session progress since March 2020, and Wall Street is heading towards a clearly green opening, as Donald Trump’s victory becomes clearer.
“So far, the market reaction is probably in line with what one would expect given the results,” notes Deutsche Bank economist Jim Reid, as Donald Trump claimed victory in the US presidential election
The sought-after dollar
The dollar is climbing against the majority of other currencies. The dollar has not experienced such a jump against the euro since March 2020, soaring 1.72% to 1.0745 dollars per euro around 08:30 GMT.
“In Mexico, concern over possible increases in customs tariffs is causing the peso to plunge,” comment analysts at Saxo Bank. The Mexican currency dropped 2.22% to 20.57 pesos per dollar.
Rates are rising
On the bond market, where debt already issued is traded, the interest rate on 10-year American government bonds jumped around 08:30 GMT, to 4.40% compared to 4.27% at close the day before, and that with a two-year maturity rose to 4.23%, compared to 4.18%.
This is a sign that the market expects “stronger growth and perhaps higher inflation”, a combination which could “slow down, or even stop, the rate cuts planned by the American central bank (Fed) , comments Stephen Dover, director of the Franklin Templeton Institute.
Bitcoin at a record high
Bitcoin soared 5.52% to $72,984, after having exceeded the $75,000 mark earlier and for the very first time, boosted by the prospect of regulatory relaxation in the event of Donald Trump’s definitive victory.
Stock markets in the green
Wall Street is headed for a sharply higher open, according to stock index futures, which provide an indication of trends before the session begins.
Around 08:30 GMT, the Dow Jones rose 2.24%, the broader S&P 500 index rose 2.00%, while the Nasdaq of technology stocks gained 1.65%, according to these futures contracts.
On the European stock markets, the indices are up sharply since the opening: the Paris Stock Exchange jumped by 2.14%, Frankfurt by 1.45%, Milan by 1.12% and London by 1.49% .
“A little surprisingly, it must be admitted,” the European markets “are holding up rather well, for the moment, in the face of this indisputable victory of Donald Trump,” wrote Alexandre Baradez, head of market analysis at IG France, shortly time before the markets open.
For good reason, “with the arrival of Donald Trump at the White House, European products could face significant challenges, as the president has clearly indicated that he will impose vast customs duties, potentially ranging from 10% on all imports at much higher levels from countries like China,” explains John Plassard, investment specialist for Mirabaud.
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