US Treasury yields jumped and Bitcoin surged to a new record as markets reacted to Donald Trump edging closer to a victory in the presidential election.

Republicans have taken back control of the Senate, while Trump is poised to return to the White House after winning the crucial battleground of Pennsylvania.

Pennsylvania has 19 electoral college votes, more than any other swing state.

Trump spoke in Florida after also having already won the two key swing states of North Carolina and Georgia.

“America has given us an unprecedented and powerful mandate,” Donald Trump said as he hailed Republican victory in the Senate.

The dollar rose 1.37 per cent against the pound on Wednesday morning to nearly a three-month high.

The US dollar index, comparing it to a basket of foreign currencies, gained 1.65 per cent to hit its highest level in four months.

US 10-year Treasury yields jumped 17 basis points to 4.44 per cent, a four-month high.

“Treasury yields have been climbing sharply, as traders assess the implications of a fresh Trump presidency for inflation and US government borrowing,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Not only is a raft of tariffs expected to be imposed next year if Trump wins, which will push up the price of imported goods for American shoppers, his vow to kick out immigrants with waves of deportations could also have economic ramifications, potentially pushing up wage bills for companies.

“His pledges of tax cuts are also considered to be inflationary and are also causing wariness about the huge US deficit swelling further.”

US equity futures are also trending upwards, suggesting a positive reaction on Wall Street. The S&P 500 closed 1.2 per cent higher last night, while the Nasdaq 100 rose 1.3 per cent.

Electric car giant Tesla was among the risers, with boss Elon Musk a staunch backer of Trump.

Bitcoin climbed to a record high as fans of the cryptocurrency expect a more supportive regulatory environment under the Republican candidate.

Meanwhile, Britain’s blue-chip FTSE 100 index is set to open 0.94 per cent higher based on premarket trading.