By Naomi Rovnick, Dhara Ranasinghe and Nell Mackenzie
LONDON (Reuters) – November was a month of clear winners and losers from Donald Trump’s U.S. election victory on Nov. 5.
Trump’s trade moves, which essentially punished tariff-sensitive assets of European exporters into the Mexican peso and spurred investment toward U.S. stocks and the dollar, proved successful. Wall Street has recovered, the dollar is up 2% against rival major currencies and bitcoin has soared.
But December could be bumpy, with Trump trading vulnerable to a possible bond market reaction to the budget’s largesse, while tariffs could boost inflation and choke supply chains.
“Elevated stock valuations in the US reflect complacency as the more challenging environment we expect is not priced in,” BCA Research said.
Here are some of the assets in the spotlight.
1/ CURRENCY misery
The euro suffered its worst monthly decline since early 2022, down just over 3% to around $1.05, due to US rate risks, political unrest in Germany and France and a sharp regional economic downturn.
Analysts expect more volatility in the $7.5 trillion-a-day currency markets as the debate rages over how low the euro can go and whether Trump will really boost the U.S. economy while leaving most others to suffer.
The Mexican peso fell more than 1% against the dollar in November, while the pound sterling lost almost 2%. China’s offshore yuan is set to suffer its biggest monthly decline since August 2023, down nearly 2%.
The key question on currency markets, said Nick Rees, senior market analyst at Monex Europe, is: “Does Trump’s election victory portend a fundamental structural shift in the global economy, or are markets just mired in panic?”
2/ BITCOIN, BOOM OR BUST?
If there’s one asset that knocked it out of the park in November, it’s bitcoin.
The cryptocurrency has surged 37%, briefly hitting the $100,000 mark on hopes of a more crypto-friendly regulatory environment under Trump.
The last time bitcoin rose this much was February, when money flowed into new exchange-traded bitcoin products.
So, what’s next? For some in the industry, a rise to $100,000 would mean the niche asset is finally going mainstream.
“If bitcoin breaks through the $100,000 level… even more people could find crypto on their radar,” said AJ Bell investment analyst Dan Coatsworth.
Others believe there is a risk of speculative overload, meaning Bitcoin’s rise might as well be followed by a sharp decline that catches some investors off guard.
3/ TECH UNDER RATES
Wall Street’s tech-focused Nasdaq 100 posted its best monthly gain since June, when Trump ally Elon Musk’s Tesla soared 33% and AI zealot Nvidia boosted even as the chipmaker forecast slower sales growth.
