Dollar soars as Donald Trump closes in on victory

The US dollar is surging and on track for its best day in four years as Donald Trump is on the cusp of winning back the White House in the US presidential race.

Bitcoin is also at a record high as traders bet on potential new tax cuts, tariffs, and rising inflation under Trump.

The result of the election is expected to have a major impact on the global economy.

According to a projection from the BBC's US partner CBS, the Republican Party is set to take control of the Senate but there are still votes left to count.

The dollar has soared by around 1.5% against a host of different currencies, including the pound, euro and the Japanese yen.

Meanwhile, the value of Bitcoin jumped by $6,000 to record high of $75,371.69, surpassing the previous high of $73,797.98 in March this year.

Experts are predicting a turbulent day for the financial markets as a response to global uncertainty and Trump's potential plans for the economy.

"Many of his measures will be inflationary and likely to lead to a rise in bond yields, putting pressure on the Federal Reserve in its quest to bring interest rates down," said Lindsay James, investment strategist at Quilter Investors.

Trump has pledged to make the US the "bitcoin and cryptocurrency capital of the world".

He plans to put billionaire Elon Musk in charge of an audit of governmental waste.

In Japan, the benchmark Nikkei 225 stock index ended the session up by 2.6%, while Australia's ASX 200 closed 0.8% higher.

In mainland China, the Shanghai Composite Index was flat, while Hong Kong's Hang Seng was down by around 2.5%.

The major US stock indexes also appeared to be set to open sharply higher. That came after the Dow Jones Industrial Average, S&P 500 and Nasdaq all closed more than 1% higher on Tuesday.

Tesla's Frankfurt-listed shares rallied over 14% at the open on Wednesday. Elon Musk, Tesla's top shareholder, has supported Trump throughout his electoral campaign.

Donald Trump has said he would dramatically increase trade tariffs, especially on China, if he became the next US president.

"Trump’s global trade policies are causing particular angst in Asia, given the strong protectionist platform on which more aggressive tariffs on imports into the US have been pledged," said Katrina Ell, director of economic research at Moody's Analytics.

The former president's more isolationist stance on foreign policy has also raised questions about his willingness to defend Taiwan against potential aggression from China.

The self-ruling island is a major producer of computer chips, which are crucial to the technology that drives the global economy.

Meanwhile, Trump's tax-cutting agenda has also been broadly welcomed by big American companies.

"If Trump gets elected, we should see pro business policies and tax cuts, in turn possibly driving up inflation and less rate cuts," said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.

If Kamala Harris wins investors expect her trade and foreign policies to be a continuation of Joe Biden's more predicable approach.

"Harris’ platform largely assumes the status quo regarding global trade flows and tariffs," said Ms Ell.

A potential Harris administration is also seen as more likely to tighten regulations on industries like banking and healthcare.

The Democratic party's renewable energy policies could also boost electric vehicle companies and solar firms.

Investors also have other key issues to focus on this week.

On Thursday, the US Federal Reserve is due to announce its latest decision on interest rates.

Comments from the head of the central bank, Jerome Powell, will be watched closely around the world.

On Friday, top Chinese officials are expected to unveil more details about Beijing's plans to tackle the slowdown of the world's second largest economy.

Source: BBC