the dollar soars, boosted by the budgetary impact of a possible election of Trump

The dollar jumped around 1.5% against the yen and the euro during Asian trade on Wednesday, boosted by announcements from the first states won by Donald Trump in the American presidential election. Around 3 a.m. GMT, the greenback climbed 1.71% against the Japanese currency, to 154.21 yen per dollar and appreciated by 1.67% against the common European currency, to 0.9302 euros per dollar. a dollar.

“Markets are starting to bet on Trump’s return”

While a feverish wait begins in the United States regarding the outcome of a very close election, the foreign exchange market reacted vigorously to the announcements of the first American states won by former Republican President Donald Trump. “The markets are starting to bet on the return of Trump. He won by a larger margin than expected in Florida, a very populous state, which reinforces expectations of Republican scores better than expected elsewhere” in the country, underlined Yugo Tsuboi, strategist at Daiwa Securities, quoted by the Bloomberg agency.

The American election is fueling a roller coaster in trade: the dollar had fallen significantly the day before after the publication of better polls for Democratic candidate Kamala Harris, before experiencing a sudden turnaround in the first polls after the start of the vote.

Markets “will adjust as new information becomes available”

Economists and investors expect that if successful, Donald Trump will put in place new customs barriers, reduce taxes and deregulate the economy – enough to cause a widening of the public deficit, then a rise in bond rates and consequently a rise in the dollar. “Throughout October, it is obvious that the dollar, Asian currencies and American interest rates have evolved according to anticipations about the American elections” and the markets “will adjust on Wednesday as the new information” on the outcome of the vote, analysts at MUFG bank had predicted.

Under a Trump presidency, “our scenario estimates that the dollar could strengthen by around 7 to 8% compared to the basic outlook in the event of Ms Harris’ victory”, they insist. Conversely, if Kamala Harris won, the correction could be brutal, “with a weakening of the dollar and strengthening of Asian currencies (economies) oriented towards exports”, like Japan.