Expectations of Donald Trump's imminent US election victory have driven the dollar higher in early trading, with Treasury yields soaring as the so-called Trump trade returns.
Trump, whose Republican party is also on-track to claim both Congress and the Senate, has already declared victory.
Polling data overnight and in the early hours in the UK showed Trump leading in several key swing states, with the Republican nominee leading Democrat Kamala Harris by 266 to 194 electoral college votes by 7.30am GMT – just shy of the 270 needed to win.
The Fed is still expected to cut interest rates at its meeting that starts today. The Bank of England is also tipped to cut base rate by 0.25 percentage points to 4.75 per cent tomorrow.
But markets believe the policies of a second Trump term would be inflationary, thereby potentially greatly reducing the volume of future Federal Reserve interest cuts.
This perception saw Treasury yields recommence their ascent, with the 10-year climbing as much as 18 basis points to 4.47 per cent - its highest since July.
The yield on the 10-year had already soared by more than 40 bps in the month leading up to the US election.
The US dollar also soared, adding 1.3 per cent against the pound to £0.777 and 1.8 per cent against the euro to €0.931.
Trump is seen as good for stock markets dominated by big US tech firms and the FTSE 100 responded to sentiment and the fall in the pound, which flatters UK shares, by jumping 1.13 per cent to 8,365 in early trading.