Bitcoin Reaches Three-Month High Amid Rising Trump Election Odds

Bitcoin surged to a three-month high in early trading on Monday as the U.S. dollar continued to strengthen in anticipation of the upcoming presidential election. With only two weeks left until the election on November 5 polling data indicates a growing likelihood of former President Donald Trump securing a victory which is influencing currency markets significantly.

The prospect of a Trump presidency is boosting the dollar as his proposed economic policies are expected to maintain high U.S. interest rates while potentially weakening the currencies of trading partners. Recent market movements have been shaped by the European Central Bank's dovish interest rate decisions and strong U.S. economic data which have shifted expectations about the timeline for potential U.S. rate cuts especially if Trump returns to the White House.

In currency trading the Japanese yen slipped 0.1% to 149.32 per dollar staying below the critical 150 per dollar mark although it had briefly breached this level last week for the first time since early August. The dollar index which measures the greenback against a basket of major currencies stood at 103.45. After a 0.3% decline on Friday driven by increased risk appetite following China's announcement of a comprehensive stimulus package the dollar still recorded a weekly gain of 0.55%. The euro remained stable at $1.0866 while the British pound traded flat around $1.3045.

Bitcoin was last seen up 0.8% at $69,400 marking an 18% increase since October 10. The cryptocurrency's rise has been attributed in part to Trump's improving prospects as his administration is perceived to favor a more lenient approach to cryptocurrency regulation.

Looking ahead with no significant economic events on the calendar for the week market participants are expected to focus on corporate earnings and the implications of the upcoming U.S. election. Chris Weston head of research at Australian online broker Pepperstone noted that as the election date approaches traders must consider whether it is the right moment to make more decisive election-related trades. He emphasized that the most straightforward approach to mitigate the risks posed by potential Trump tariffs is to take long positions in dollars against the euro Swiss franc and Mexican peso.

Brad Bechtel global head of FX at Jefferies added that increasing real interest rates are supporting the dollar particularly against these currencies. He anticipates that this trend will persist leading up to the election and potentially continue if Trump wins.

In the previous week the yen experienced a decline of 0.3% while the euro fell by 0.6%. The dollar index saw an increase of 0.55% during the same period. Notably the Mexican peso depreciated by 3% against the dollar. The euro has lost over 3% in the last three weeks dropping below its 200-day moving average and is now hovering near a two-and-a-half-month low.