Money and Markets

Dollar surges as Trump and Biden go neck-and-neck in a tight presidential race

Business Insider US
  • US stock futures and the dollar surged, as the tight race between Trump and Biden that investors had prepared for unfolded.
  • Futures on the technology-heavy Nasdaq 100 were among the top gainers, rising by around 3%, while Bitcoin and crude oil rallied sharply.
  • Trade-sensitive currencies, like the Mexican peso and the Chinese yuan fell, along with safe-havens such as gold and the Japanese yen.
  • The rand weakened after reaching its best level since March on Tuesday.
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US stock futures and the dollar rallied on Wednesday, as the close presidential race that investors had expected played out, giving a boost to technology shares, crude oil, and cryptocurrencies.

The rand, which on Tuesday strengthened to its best level since March, weakened from R16.11/$ to R16.31 on Wednesday morning. 

There is still no clear leader as yet in the presidential race between US president Donald Trump and Democratic presidential Joe Biden as results continue to come in. Polls have now closed or are closing in most states, including several key battlegrounds. Florida is the first swing state to be called for either candidate. 

Futures on US benchmark indices rallied sharply. Futures on the tech-heavy Nasdaq 100 surged by almost 3%, while those on the S&P 500, the Dow Jones, and the small-cap Russell 2000 rose between 0.3 and 1.3%. 

Other more risk-sensitive assets such as oil and Bitcoin bounced, while more safe-haven assets like gold and the Japanese yen came under fire. 

Even with a close race, volatility remained fairly modest, as investors had already long positioned for the result to take far longer than election night to be clear.  

"As the night grinds on Donald Trump appears to have staged a remarkable comeback, as polling across the US suggests he has had a good night. The market reaction has so far avoided the volatility of 2016, at least on the downside, with yet more gains for stock futures," Chris Beauchamp, chief market analyst at online broker IG.

"This impressive recovery by the party viewed as pro-business has been taken in a positive vein by markets, although there is still a lot of counting to be done."

The dollar index rallied by 0.4%, driven by gains against the yen, which fell 0.4% and the euro, which shed 0.5%. 

Blue-chip shares in Asia were swept higher by the optimism across US markets. Japan's Nikkei was the strongest performer, up 2% thanks to the weakness in the yen, while Seoul's KOSPI rose 1%. Chinese and China-sensitive indices were more muted. The Shanghai Composite was almost unchanged on the day, as was Australia's S&P/ASX 200.

Here's what's going on in the most election-sensitive markets:

Top 5 Gainers

AssetLast PricePercent Change
Bitcoin$13,895 3.52%
Nasdaq 100 Futures 11,569 points2.70%
WTI Crude Futures$38.52 a barrel2.28%
Dollar/Mexican Peso MXN 40.55 2.12%
S&P 500 Futures3,399 points1.13%

Top 5 Losers

AssetLast PricePercent Change
10-Yr Treasury Yields 0.928%-7.70%
VIX Futures31.2 points-1.35%
Gold$1,910.35 an ounce-0.48%
Offshore Yuan/Dollar6.7034-0.32%

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