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China’s yuan and Singapore’s dollar slid the most among Asian currencies on Wednesday, while the Mexican peso hit a two-year low as the dollar surged on projections that Republican Donald Trump had won the US presidential election.
The Singapore dollar was last down 1.3 per cent at a three-month low and set for its worst session since August 2015.
Thailand’s baht slumped as much as 1.9pc to a two-month low, in its biggest one-day drop since February 2023.
The dollar was set for its biggest daily rise since March 2020 against major peers, and US Treasury yields also soared to multi-month peaks.
Fox News projected that Trump has won the US presidency defeating Democrat Kamala Harris, and Republicans took control of at least one chamber of Congress. Other media outlets were yet to call the race.
Analysts view Trump’s proposed tariff and immigration policies as inflationary, and are therefore likely to put upward pressure on prices, bond yields and the dollar, and undermine the currencies of trading partners.
“The market is making positioning adjustments to prepare for a possible Trump victory,” said Ken Cheung Kin Tai, chief Asian foreign exchange strategist at Mizuho Bank.
“Regional investors are particularly worried about the impact from tariffs because most Asian economies rely on trade growth.”
The Chinese yuan and Mexican peso are seen as the most vulnerable to a stronger dollar and heavier tariffs under Trump.
The yuan was last down 0.8pc, while the peso dropped as low as 20.7080 for the first time since August 2022.
MUFG analysts feel a Trump win would hit the South Korean won, Singapore dollar, Thai baht and Malaysian ringgit harder than other Asian currencies because of their export orientation and sensitivity to a potential slowdown in China’s growth.
The ringgit, Southeast Asia’s best-performing currency this year, was last down 1.5pc.
Malaysia’s central bank kept interest rate unchanged, as expected, and said it was monitoring the US election and was prepared to manage market volatility and ensure orderly market conditions.
The Indonesian rupiah fell 0.7pc to a nearly three-month low. The central bank governor said the short-term focus was on the rupiah’s stability amid the US election outcome.
An official said the central bank was also ready to stabilise the rupiah, including via steps such as intervention, if there was excessive volatility.
Regional stock markets were mixed, with equities in Manila down 1.2pc, while those in Taipei rose 0.5pc and Mumbai gained 0.9pc.
‘Trump trades’ surge as Trump claims victory
Investors bought dollars, bitcoin and stocks, and sold bonds as Donald Trump claimed victory in the US presidential election and Republicans took control of at least one chamber of Congress.
US stock futures hit record highs, the dollar surged and Treasury yields jumped, while bitcoin broke $75,000 for the first time — all moves flagged by investors as likely should Trump win over Democrat Kamala Harris.
“Not only are markets positioning themselves for a comfortable Trump victory in the electoral college, but the prospect of a Republican-controlled Congress,” said Matthew Ryan, head of market strategy at Ebury.
The results so far underscore how one of the most unusual presidential elections in modern US history could have far-reaching implications for tax and trade policy as well as US institutions.
The results affect assets globally and will determine the outlook for US debt, the strength of the dollar, and a host of industries that make up the backbone of corporate America.
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