A turbulent day in the financial markets lies before us, as traders drive up the value of the dollar – and push down bond prices – as the US election results come in.
As counting continues, Donald Trump has declared victory over Kamala Harris.
Trump’s early gains triggered a surge in the value of the US dollar, which is on track for its best day in four years. The greenback has jumped by about 1.5% against a basket of currencies, including strong gains against the pound and the euro.
The pound has dropped towards its lowest level against the US dollar in two months.
Sterling has shed almost two cents against the dollar since the US election results started to come in, and has fallen to $1.2855, down from $1.3041 last night.
That is only its lowest level in a week (since the pound dropped after the budget), but if it slips much further, it will be the lowest since mid-August.
The euro slid by 1.8%. That knocks the euro down by two cents against the US dollar, sliding to $1.073 this morning from $1.093 last night.
Bitcoin has soared to a record high today.
The world’s biggest cryptocurrency has gained more than 8% to hit $75,389, exceeding its previous peak in March. Other crypto assets are also rallying.
US government bond yields (the interest rate on American debt) are also soaring. With bond prices falling, the yield on 10-year Treasury bills has jumped by 12 basis points to 4.41%, the highest level since the start of July.
The London stock market is rallying in early trading.
The FTSE 100 share index has gained 110 points, or 1.36%, to 8,283 points, the highest in over a week.
The weaker pound is lifting the share prices of multinational firms (as their dollar earnings are now more valuable in sterling terms).
The agenda • 9am GMT: eurozone services PMI for October • 9.30am GMT: UK construction PMI for October • Noon GMT: The weekly US mortgage application data • 2.30pm GMT: Treasury committee hearing with Rachel Reeves and top officials on the budget
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