Market Turmoil: Dollar Rises as Trump Assassination Attempt Bolsters Election Odds

The U.S. dollar surged and cryptocurrency prices spiked on Monday following an attempted assassination of former U.S. President Donald Trump. The incident strengthened Trump's odds in the upcoming U.S. elections, causing market movements, particularly in forex and crypto sectors. Meanwhile, Chinese economic struggles continued to weigh on global markets.

The U.S. dollar surged broadly on Monday and cryptocurrency prices skyrocketed as markets reacted to an attempted assassination of former U.S. President Donald Trump. The incident has seemingly bolstered Trump's odds in the upcoming U.S. elections, stirring a predominantly quiet Asian trading session due to a holiday in Japan.

"The attempted assassination probably enhances Trump's 'reputation for strength'," noted Jack Ablin, chief investment officer at Cresset Capital. Online betting site PredictIT adjusted its forecast, showing a Republican victory at 66 cents, up from 60 cents on Friday, while Democratic chances fell to 38 cents. Republicans are now deemed twice as likely to win.

As a result, the dollar strengthened, with the euro easing 0.14% to $1.0895, and sterling dropping 0.09% to $1.2978. U.S. Treasuries were untraded in Asia due to the Japan holiday, but futures indicated rising yields. Crypto markets mirrored this trend; bitcoin surged 9% to $62,760, while ether jumped over 7% to $3,336.80.

The dollar index remained stable at 104.20. Under Trump, markets expect a more hawkish trade policy and less regulation, alongside potential extensions of corporate and personal tax cuts. Rising budget deficits are a concern.

Meanwhile, headlines from China diverted attention towards its much slower-than-expected economic growth in the second quarter. Property sector woes and job insecurity dampened domestic demand, despite government measures to prop up the economy. The Chinese yuan slightly extended its losses to trade 0.13% lower at 7.2602 per dollar.

The yen also reversed some of its recent gains, standing at 157.95 per dollar. Tokyo is suspected of intervening last week to stabilize its currency, possibly spending up to 3.57 trillion yen ($22.4 billion).