US dollar surges against Singdollar in broad rally as Trump wins

TOKYO – Investors bought US dollars, Bitcoin and stocks, and sold bonds as Donald Trump was elected the 47th US president on Nov 6, and Republicans took control of at least one chamber of Congress.

US stock futures hit record highs, the dollar surged, and Treasury yields jumped, while Bitcoin broke US$75,000 for the first time.

Trump’s agenda of tax cuts and deregulation could give corporate America a tangible boost, though steep tariffs and a potential global trade war under his presidency could cause more uncertainty and a resurgence of inflation, boosting the dollar.

“Not only are markets positioning themselves for a comfortable Trump victory in the Electoral College, but the prospect of a Republican-controlled Congress,” said Mr Matthew Ryan, head of market strategy at Ebury.

That could provide a headache for Federal Reserve chief Jerome Powell as he continues his battle to bring inflation to heel, with Trump’s plans considered inflationary.

The election comes as the US central bank prepares to deliver its latest policy decision on Nov 7 amid expectations it will cut interest rates by 25 basis points, having lowered them by 50 points in September.

Trump’s victory will affect assets globally and determine the strength of the dollar, and a host of industries that make up the backbone of corporate America.

“A lot of this is based on investors’ view that Trump would cut taxes or at least keep tax rates low. Now that it’s likely to be looking like a red sweep (of the White House and Congress), additional cuts are possible,” said Mr Ken Peng, head of Asia investment strategy at Citi Wealth in Hong Kong. “Deregulation is another major positive for the economy and markets, particularly for the financial, energy and tech sectors.”

Tariff-exposed sectors fared less well. The Mexican peso, which could be hit by tariffs, sank to a two-year low, about 3 per cent weaker than its closing price from the previous session.

The euro headed towards its biggest one-day drop since 2020, and German government bond yields staged their largest one-day drop since January, as investors priced in a sharp slowing in the economy.

The Singapore currency was also hit by the dollar rally, falling as much as 1.7 per cent. It was trading down 1.3 per cent at 1.3303 as at 4.38pm Singapore time.

The dollar also jumped 1.5 per cent to 154.38 yen, its highest since July, while it was also up more than 1 per cent against the euro.

In Asia, markets in Hong Kong and China fell as exporters’ shares slid. Trump has promised voters he will impose tariffs of 60 per cent or more on goods from China.

Hong Kong’s Hang Seng index closed down 2.2 per cent, while China’s blue-chip CSI300 Index fell 0.5 per cent.

The decline in China might have been bigger if not for Chinese leaders holding a key meeting to hammer out a package of stimulus measures aimed at kick-starting growth and providing support to the colossal property sector.

Singapore’s stock market fluctuated nervously between gains and losses in a narrow range, with the benchmark index closing up 0.6 per cent. Japan’s Nikkei surged 2.9 per cent after a stronger dollar weighed on the yen, which typically benefits the country’s export-oriented economy.

In the US, futures on the Dow Jones Industrial Average soared 1,133 points, or about 2.7 per cent. S&P 500 futures gained 2.4 per cent, and Nasdaq 100 futures climbed 1.8 per cent. The last time the blue-chip Dow jumped more than 1,000 points in a single day was in November 2022.

Shares in Tesla rallied sharply in Frankfurt, ahead of the US pre-market. Mr Elon Musk, Tesla’s top shareholder, has supported Trump throughout his electoral campaign.

Shares of Trump Media and Technology Group surged 40 per cent on the Robinhood brokerage platform.

Bitcoin sprang US$6,000 higher to a record US$75,371.69, topping its previous peak of US$73,797.98 in March. Trump has pledged to make the United States the “Bitcoin and cryptocurrency capital of the world”. AFP, REUTERS