Bitcoin, another asset that attracts investors wanting inflation-beating returns, has also surged.
“There is also a sense that perhaps Trump represents a more friendly regime for crypto,” says Bartholomew.
“There’s a certain irony, because his policies are precisely the kind of thing that would tend to push the dollar up,” says Bartholomew.
Trade tariffs and higher interest rates will both increase upwards pressure on the dollar, says Bartholomew. Since the end of September, the dollar has jumped by 2.68pc against the euro, up from $0.897 to $0.921.
“And if the Republicans are able to deliver a material tax-cutting regime, you might expect that to suck capital into the US as well. That tends to put pressure on the dollar,” he adds.
On the flip side, the Mexican peso has slumped as markets bet on the prospect of Trump tariffs, which would hit the country’s trade with the US.
US share prices are likely to rise on the back of corporate tax cuts, but the benefits will be more for small companies rather than big business.
“Small cap firms would benefit more from the corporate tax cut and are less internationally exposed,” says Bartholomew. “Typically they are more domestic and so are less worried about protectionism and trade wars.”
Larger firms are also heavily skewed to the tech sector, and there is a sense that Trump will be less tech friendly, Bartholomew adds.
Banks and other financial institutions will benefit most, however.
“They [finance firms] have really outperformed in anticipation of Trump 2.0, which would be great for companies because of the corporate tax cuts he has promised, and for financial stocks specifically because of the anticipation of more deregulation,” says Hardy.
But Trump’s power could be limited. If he wins the presidency, he will immediately be able to press ahead with trade tariffs. But he will only be able to push the button on his plans for business tax cuts and deregulation if he also secures a majority in Congress – a “Trump sweep”.
“All these trades are predicated on Trump not only winning but getting control of Congress. Otherwise the whole Trump agenda will be limited to geopolitics,” says Hardy.
But right now it is a Democratic win that would take markets by surprise. “If Harris wins the presidency, even if she doesn’t get control of the Senate, that would be the bigger shock,” says Hardy.