US Treasury yields rise and Bitcoin hits record as Trump declares election victory
US Treasury yields jumped and Bitcoin surged to a new record as markets reacted to Donald Trump edging closer to a victory in the presidential election.
Republicans have taken back control of the Senate, while Trump is poised to return to the White House after winning the crucial battleground of Pennsylvania.
Pennsylvania has 19 electoral college votes, more than any other swing state.
Trump declared victory in a speech in Florida after having earlier won the two key swing states of North Carolina and Georgia.
Walking up to the stage at 2.25am local time to a raucous ovation as God Bless The USA by Lee Greenwood was played, the former president told the crowd: “This is a movement like nobody’s ever seen before, and frankly this was I believe the greatest political movement of all time. There’s never been anything like this in this country and maybe beyond.
“And now it’s going to reach a new level of importance because we’re going to help our country heal… we have a country that needs help and it needs help very badly. And we’re going to fix our borders. We’re going to fix everything about our country.
“We made history for a reason tonight and the reason is that it’s going to be just that. We overcame obstacles that nobody thought possible and it is now clear that we’ve achieved the most incredible political thing. Look what happened. Is this crazy?”
He told supporters: “I want to thank the American people for the extraordinary honour of being elected your 47th president and your 45th president.
“Every citizen I will fight for you, for your family and your future. Every single day I will be fighting for you with every breath in my body.
“I will not rest until we have delivered the strong, safe and prosperous America that our children deserve, and that you deserve.
“This will truly be the golden age of America.
“This is a magnificent victory for the American people that will allow us to make America great again.”
Markets react as Trump declares victory
The dollar rose 1.37 per cent against the pound on Wednesday morning to nearly a three-month high.
The US dollar index, comparing it to a basket of foreign currencies, gained 1.65 per cent to hit its highest level in four months.
Trump’s declaration of victory triggered an aggressive selloff in US government debt.
US 10-year Treasury yields jumped 13 basis points to 4.42 per cent, a four-month high, as traders weighed how a fresh Trump presidency would impact inflation and government borrowing.
“Not only is a raft of tariffs expected to be imposed next year if Trump wins, which will push up the price of imported goods for American shoppers, his vow to kick out immigrants with waves of deportations could also have economic ramifications, potentially pushing up wage bills for companies,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“His pledges of tax cuts are also considered to be inflationary and are also causing wariness about the huge US deficit swelling further.”
US equity futures are also trending upwards, suggesting a positive reaction on Wall Street. The S&P 500 closed 1.2 per cent higher on Tuesday, while the Nasdaq 100 rose 1.3 per cent.
Electric car giant Tesla was among the risers, with boss Elon Musk a staunch backer of Trump.
Bitcoin climbed to a record high as fans of the cryptocurrency expect a more supportive regulatory environment under the Republican candidate.
Britain’s blue-chip FTSE 100 index opened 0.71 per cent higher at 8,230.16, while the mid-cap FTSE 250, which is more closely aligned with the health of the UK economy, rose 1.49 per cent to 20,673.69.