The dollar saw a broad increase on Monday, accompanied by a surge in cryptocurrencies, as market sentiment leaned towards a potential victory for Donald Trump in the upcoming US elections following an assassination attempt on the former President.
During a campaign rally in Pennsylvania, where shots were fired, Donald Trump, 78, sustained an injury to his right ear, resulting in a bloody face. Despite this, his campaign assured that he was in good condition.
Investors started favoring the odds of a Trump victory in November post the incident, leading to a rise in the dollar and US Treasury yields, along with a boost in cryptocurrencies.
Vasu Menon, OCBC’s managing director of investment strategy, noted that sympathy votes might bolster Trump’s chances, potentially boosting voter turnout for him.
As per online betting site PredictIT, Republicans are now at 66 cents for a win, up from 60 cents on Friday, while Democrats are at 38 cents. This suggests Republicans are twice as likely to win the election.
Currency-wise, the euro dropped 0.2% against the dollar to $1.0888, while sterling slipped 0.13% to $1.2973.
The greenback also gained 0.48% against the Norwegian crown and 0.35% against the Swedish crown.
Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank, anticipated a potential rise in the USD if Trump secures a second term owing to geopolitical dynamics.
Long-term US bond yields rose on expectations of policies under a Trump administration increasing government debt and fueling inflation, with the 10-year Treasury yield rising approximately three basis points to 4.2158%.
Cryptocurrency prices surged, with bitcoin up around 5% at $62,997 and Ether rising nearly 6% to $3,368.14.
In the backdrop of Trump’s support for cryptocurrency, other currencies like the Australian and New Zealand dollars saw small declines.
China’s economic data showing slower growth in the second quarter dominated headlines, along with a declining property market and weak consumer demand. The Chinese yuan softened marginally to 7.2626 per dollar.
Events at China’s plenum, a meeting of top officials, and Japan’s market interventions to support the yen against the greenback were also noted in the financial landscape.
