Early Asian trading on Monday saw bitcoin hits high its three months as investors built up their bets ahead of the US presidential election as the latter tightens its chances, according to polls, while the US dollar strengthens. It’s rising for Donald Trump who will be contesting the election scheduled for November 5th, given his supposedly favorable policies to dollar strength, which are influencing market movements worldwide.
Rallying Amid Political Uncertainty
The world’s top cryptocurrency, Bitcoin hit $69,400, surging 0.8% in the day and 18% over the last two weeks since October 10th. There have been bullish sentiments pouring in for Bitcoin ahead of possibly a softer regulatory stance on digital currencies should Trump sit back at the presidency again. The optimism comes amid all-around volatility in the crypto market remaining sensitive to any happenings in politics and regulator shifting sands.
US Dollar Steadies End
The dollar index, measuring the strength of the greenback against a basket of major currencies, rose to 103.45, with 0.55% gains over the week preceding. The fundamental reasons for the surge in the dollar are largely an expectation from a conviction in the belief that Trump’s policies on trade and tariffs are going to be translated into higher US interest rates, thereby making the US more attractive for investments and boosting the currency. In this way, the market participants think that a Trump win would be an event that would tighten monetary conditions further and make dollars an even better haven.
This past week, actions in Europe from the ECB have had a sizeable impact on currency movements as a dovish rate cut has been extended. Additionally, strong U.S. economic data has contributed to the growth of U.S. interest rate declines and shifted those declines farther out. Analysts expect this trend for a stronger dollar to last much longer than November if Trump wins the election.
Global Currency Impact
The yen lost 0.1% in foreign exchange markets and traded at 149.32 per dollar. This has once in a while fallen below 150 for the first time since August. Traders closely watched this psychological level. The euro and sterling remained flat at $1.0866 and $1.3045, respectively.
According to Brad Bechtel, global head of FX at Jefferies, one of the most important factors supporting the dollar is rising real interest rates in the US, “especially against the euro, Swiss franc, and Mexican peso.” “We expect this trend to continue straight into the election, and if Trump wins, likely well after the election as well,” Bechtel said, noting the long-term implications of a potential Trump presidency in currency markets.
The euro, for example, had entered a downtrend, falling by over 3% in the last three weeks and below its 200-day moving average. It is now hovering near a two-and-a-half-month low as investors seek safer assets amid the uncertainty.
Market Outlook Ahead of Election
With little in terms of major economic data releases due this week, attention is fixed on some big-ticket corporate earnings reports that are set, and finally, on the result of the US election. As noted by Head of Research for Australian broker Pepperstone Chris Weston, this environment has been conducive to election bets among traders.
“With only 15 days to go before the US election, one had to decide whether now was an appropriate time to begin to commit with greater conviction to election trades,” Weston commented. He advised the best hedge against election risks would be through long dollar positions, particularly versus the euro, Swiss franc, and Mexican peso.
CAD Steps Along
The Canadian dollar’s price has not moved much in the past week while the overall market moves have been happening. On the other hand, the Mexican peso has faced extreme losses and declined 3% in the past week as the fear of disruption in US-Mexico trade relations by Trump’s policies keeps weighing on the currency.
Conclusion
The closer it gets to the US presidential election, the more intense scrutiny has been toward the emerging political scenario on world financial markets. Bitcoin’s increase and the strengthening dollar both speak to how these economic policies, sentiments in the markets, and digital assets are all tied together when uncertainty emerges in the political domain. If Trump manages to win, cryptocurrency markets and the US dollar may also eventually rise further, which will open a volatile but potentially rewarding stage for investors.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial, investment, or legal advice. The article does not endorse or guarantee the success of any specific projects, tokens, or platforms mentioned. Neither the author nor the website is responsible for any financial losses or gains that may result from acting on the information
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