The dollar surged and bitcoin reached a record high Wednesday, with global equity markets rallying as traders increasingly speculated on a potential victory for Donald Trump in the US presidential election.

Early projections showed the Republican candidate outperforming his opponent, Vice President Kamala Harris, stirring investor sentiment in favor of Trump's economic policies.

Both Trump and Harris claimed anticipated wins in traditional strongholds, but early indicators suggested Trump was gaining momentum in pivotal swing states, igniting a market response often dubbed the "Trump Trade." Investors have speculated that a win for the former president would bring sweeping tax cuts, new tariffs, and deregulation measures, fueling a boost for the US dollar.

In currency markets, the dollar jumped 1.5% to 154.33 yen, marking its highest level since July. The greenback also saw gains of more than 1% against the euro and over 2% against the Mexican peso.

Bitcoin surged to an all-time high of $75,005.06, surpassing its previous record of $73,797.98 set in March. Throughout his campaign, Trump promised to position the US as the "world capital of bitcoin and cryptocurrencies."

While several swing states remained too close to call, early counts indicated Trump was ahead in Georgia, prompting heightened interest among market players. "Georgia starting to glow red may have been the trigger," said Max Gokhman of Franklin Templeton Investment Solutions. "If I had to pick one asset as a barometer of Trump sentiment, it would be bitcoin."

Eyes on Congress

Analysts also focused on Congressional races, suggesting that a Republican-dominated House and Senate could catalyze the dollar's rise and increase Treasury yields, with Trump's anticipated policies seen as inflationary.

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All 435 seats in the House of Representatives are up for grabs, with control too close to call. Although Democrats currently hold a minority, they are hopeful of flipping at least four seats to regain the majority in the House, with pivotal races in New York and California potentially extending the final outcome by days.

The stakes are high, with Republicans aiming for a majority that would enable them to block key aspects of Democrat Kamala Harris' potential agenda, should she win over Donald Trump in the presidential race.

Control of the Senate is particularly important, as it would allow Republicans to halt appointments and policy initiatives, while the House, responsible for revenue-raising bills, could shape budget priorities.

"Control of the Senate and House by Republicans could bring sweeping spending or tax policy shifts," said Stephen Innes of SPI Asset Management, noting that gridlock in Congress could temper volatility.

A strong Republican win could present challenges for Federal Reserve Chair Jerome Powell, who is focused on curbing inflation. The election's outcome comes as the Federal Reserve prepares to announce its latest policy decision on Thursday, with expectations of a 25-basis-point rate cut following a 50-point reduction in September.

Race getting tighter

The US Presidential election is only getting more heated by the minute as former US President Donald Trump soars closer to the needed 270 electoral votes, with a projected 198 votes compared to Vice President Kamala Harris' 112.

Although the results are favoring Trump so far, the West Coast and the Northeast are known to be Democrat strongholds, and the voting is yet to conclude there with the race being too close to count thus far in areas where polls have already closed.

Thus far, Trump has garnered Indiana, Kentucky, South Carolina, Ohio, West Virginia, Alabama, Florida, Mississippi, Missouri, Oklahoma, Tennessee, Arkansas, Louisiana, Nebraska, North Dakota, South Dakota, Texas, Wyoming, Montana, and Utah.

The Republican, meanwhile, is leading in Georgia, North Carolina, Maine, Pennsylvania, Iowa, Kansas, Minnesota, and Wisconsin.

Vice President Harris, on the other hand, has won the states of Vermont, Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Massachusetts, New Jersey, Rhode Island, Colorado, and New York.

She has the lead in Virginia, New Hampshire, Arizona, Michigan, and New Mexico.